The Bank for International Settlements (BIS) in collaboration with the central banks of France, Singapore, and Switzerland, have collectively declared a triumphant trial of cross-border transactions and settlement using wholesale central bank digital currencies (wCBDCs).
This trial integrated cutting-edge decentralized finance (DeFi) methodologies and was carried out on a public blockchain.
Project Mariana Tested Cross-Border Trading Using CBDCs
Project Mariana, a collaborative initiative by three BIS Innovation Hub centers – Swiss, Singapore, and Eurosystem Hub Centers, together with the Bank of France, Monetary Authority of Singapore, and Swiss National Bank, showcased the potential for cross-border transactions and settlements using hypothetical wCBDCs of the euro, Singapore dollar, and Swiss franc among virtual financial entities.
The accomplishment of this project was anchored in three primary aspects:
- Unified Technical Token Standard: A consistent token offered by a public blockchain to ensure smooth interaction and conversion among multiple currencies.
- Effortless Transfer Bridges: Systems ensuring smooth migration of wCBDCs between varying networks.
- Automated Market Maker (AMM): A unique decentralized exchange that automatically determines prices, carries out, and instantly settles spot FX operations.
The AMM skillfully amalgamated liquidity from the virtual euro, Singapore dollar, and Swiss franc wCBDCs, deploying state-of-the-art algorithms for auto-pricing and execution of spot FX operations.
Ultimately, Project Mariana was devised to delve into the advanced financial market infrastructures aimed at refining cross-border transaction and settlement procedures among financial establishments.
Project Leverages Public Blockchain to Enable Seamless Exchange
Utilizing a unified token standard on a public blockchain, it ensures smooth transitions and compatibility across varied local payment and settlement infrastructures overseen by the involved central banks.
This method provides valuable perspectives for integrating global considerations into the continuous evolution of wCBDC designs.
The report emphasized that while Project Mariana signifies notable progress, it’s vital to understand that the tokenization and DeFi sectors are still nascent.
Cecilia Skingsley, who leads the BIS Innovation Hub, commented:
“Project Mariana blazes a trail in harnessing innovative technology for interbank foreign exchange spheres. It compellingly showcased the viability of transacting wholesale CBDCs internationally through cutting-edge mechanisms like automated market makers.”
