Visa Europe Collab, the innovation hub of Visa Europe, has collaborated with Canadian blockchain specialist BTL Group to explore potential applications for blockchain technology in the financial services ecosystem.

The project will use BTL's cross-border settlement platform Interbit to explore the ways in which a blockchain-based settlements can reduce the friction of domestic and cross border transfers between banks.

Few European lenders have been invited by Visa and BTL to participate in the project and test a system for sending money over blockchain.

Through this project, the companies intend to lower costs, speed up settlement time and reduce credit risk in the market for transferring funds between banks both domestically and internationally.

Hendrik Kleinsmiede, co-founder and innovation partner at Visa Europe Collab, said: “We’ll work closely together on the development and implementation of the PoC, ensuring that all participants come away with new knowledge and insight into the role that the blockchain could play in interbank settlements in the future.

“For me the opportunity is a fascinating and potentially very beneficial one. 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.”