[The article has been updated with additional information]

Visa, the world’s largest payment network, has collaborated with BTL Group, a technology company and blockchain solutions provider, to adapt its technology for processing interbank payments.

Financial Times reported that on Thursday, Visa will invite lenders to test a system for sending money over blockchain. The project aims to lower costs, speed up settlement time and reduce credit risk in the market for transferring funds between banks both domestically and internationally.

“We’re now inviting a small number of European banks to participate in the project alongside us and BTL,” Hendrik Kleinsmiede, co-founder of Visa Europe Collab, the company’s innovation hub, said in a blog post. “Participating banks will be able to connect to the network and send funds to other banks in the network across multiple currencies.”

Founded last year by the brothers Guy and Hugh Halford-Thomson, BTL is currently focused on developing blockchain technologies to disrupt and transform existing industries. Technology is developed in-house and through BTL's incubator and accelerator programs, based in Vancouver, British Columbia. BTL's first technology platform is a remittance business called Interbit with a focus on leveraging blockchain technology to create rapid and cost effective "cash-in cash-out" settlement solutions from Canada and the U.K. to target countries.

“The project will use BTL's cross-border settlement platform Interbit to explore the ways in which blockchain-based settlements can reduce the friction of domestic and cross border transfers between banks - reducing cost, settlement time, credit risk, and by leveraging smart contracts to automate many of the regulation and compliance requirements of domestic and international transfers”, Kliensmiede said .

According to Financial Times, the project being developed with Visa uses smart contracts, which Guy Halford-Thomson believes could reduce counterparty risk of cross-border transfers by making them simultaneous.

Kleinsmiede told the publication house that Visa aimed to complete the “proof of concept” within 100 days, by which time he expected to have found banks to send money between each other using the blockchain technology.

“Through the use of smart contracts and blockchains I believe we can create a fast, compliant and low-cost interbank payment and settlement service, with embedded regional compliance,” he said.