BIS, France, Singapore, and Switzerland Report Success in Cross-Border Wholesale CBDCs Testby Fintech News Singapore October 2, 2023
The Bank for International Settlements (BIS), in collaboration with the central banks of France, Singapore, and Switzerland, have concluded “Project Mariana“.
This project examined the cross-border trading and settlement of wholesale central bank digital currencies (wCBDCs) using state-of-the-art decentralized finance (DeFi) concepts on a public blockchain.
Jointly developed by the BIS Innovation Hub centres, the Bank of France, the Monetary Authority of Singapore, and the Swiss National Bank, Project Mariana showcased the potential of blockchain in the international financial landscape. The test revolved around simulated trades of hypothetical euros, Singapore dollars, and Swiss francs wCBDCs among virtual financial establishments.
Essential to the process was a universal token standard on a public blockchain, smooth transfer mechanisms for wCBDCs across networks, and an Automated Market Maker (AMM) that autonomously oversees spot FX transactions.
The AMM’s unique algorithms enabled spot FX transactions to be instantaneously priced and settled, hinting at its potential in future financial infrastructures.
The project balances central bank needs and financial institutions’ interests and paves the way for current wCBDC design explorations.
While the technology remains in its infancy, BIS and its global partners remain committed to exploring its benefits and challenges. It’s crucial to note that Project Mariana is experimental and doesn’t suggest any intention of the central banks to release wCBDC or endorse any specific tech solution.
Cecilia Skingsley, Head of the BIS Innovation Hub, stated, “Project Mariana pioneers the use of novel technology for interbank foreign exchange markets.”
Emmanuelle Assouan, Director General for Financial Stability and Operations at Banque de France emphasised that the project could set the stage for the evolution of cross-border payments in the future.
Sopnendu Mohanty, Chief FinTech Officer, MAS, and Thomas Moser from the Swiss National Bank recognised such initiatives’ promising future and feasibility.