The Bank for International Settlements (BIS) has recently completed Project Mariana, a collaborative initiative with the central banks of France, Singapore, and Switzerland. The project aimed to explore the possibilities of wholesale central bank digital currencies (wCBDCs) in cross-border trading and settlement between financial institutions. This endeavor, developed by three BIS Innovation Hub centers, alongside the Bank of France, the Monetary Authority of Singapore, and the Swiss National Bank, focused on harnessing the power of decentralized finance (DeFi) technology on a public blockchain.
Project Mariana created a simulated environment to test cross-border trading and settlement of hypothetical wCBDCs in euro, Singapore dollar, and Swiss franc between financial institutions. The proof of concept relied on a common technical token standard and bridging technologies to enable seamless wCBDC transfers across networks. An Automated Market Maker (AMM) was utilized to facilitate immediate pricing, execution, and settlement of spot FX transactions.
The AMM pooled the liquidity of the hypothetical wCBDCs, allowing transactions to be settled instantaneously. This shed light on the potential protocols that could be utilized by future financial market infrastructures for efficient cross-border trading and settlement.
The architecture of Project Mariana successfully balanced the central banks’ need for domestic oversight and autonomy with the interests of financial institutions in the smooth holding, transferring, and settling of wCBDCs across borders. By employing a common token standard on a public blockchain, the project facilitated interoperability and seamless exchange of wCBDCs across various local payment and settlement systems.
Cecilia Skingsley, the Head of the BIS Innovation Hub, emphasized the successful demonstration of exchanging wholesale CBDC across borders using innovative technology and the collaborative efforts of diverse teams. She highlighted that Project Mariana pioneers the utilization of novel technology in interbank foreign exchange markets. However, it is essential to note that this project is purely experimental and does not indicate any intention by the partner banks to issue wCBDC or endorse any specific technological solution, including DeFi.
Project Mariana represents the first cross-center project by the BIS Innovation Hub and serves as a crucial step in exploring advanced solutions to enhance cross-border payments. While further research and experimentation are still required, Banque de France will host a live demonstration of Project Mariana at a conference on October 3rd, where the potential of wholesale CBDCs will be discussed.
Ultimately, this project emphasizes the potential and feasibility of innovative solutions in a future where tokenized assets dominate, underlining the need for continuous exploration in this field.
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