Codenamed "Project Dunbar," the study aims to develop prototypes for a common platform that will enable international settlement in digital fiat currencies issued by central banks, BIS said in a release Thursday. The system would allow direct transactions in central bank digital currencies, or CBDCs, between institutions, while reducing time and cost, according to BIS.

Globally, central banks are trying to come to terms with emerging payment technologies pioneered by tech firms including China's Ant Group Co. Additionally, Facebook Inc.'s Diem project, formerly known as Libra, is building out a global payments network that could service its own stablecoin or central bank digital currencies.