- Bank of International Settlements (BIS) utilized Ethereum’s Sepolia testnet and Curve Finance’s smart contracts in their Project Mariana to assess the potential of Central Bank Digital Currencies (CBDCs) in augmenting cross-border transactions.
- Despite the utilization of open-source DeFi infrastructure, there has been no comment from Curve Finance or Ethereum core developers regarding this collaborative effort.
The banking echelons are actively exploring the blockchain domain to refurbish the cross-border payments scene. Among these, Project Mariana, spearheaded by the Bank of France and supported by the BIS, has concluded successfully, earmarking the indispensable role of blockchain in fostering efficient and secure transnational transactions. A notable disclosure from the technological realm of this endeavor was the utilization of Ethereum’s Sepolia testnet and Curve Finance’s smart contracts, earmarking a significant stride toward institutional acceptance of blockchain.
Bank of International Settlements uses public @ethereum Sepolia testnet blockchain and @CurveFinance smart contracts for their cross-border FX AMM pilot.
Although BIS goes to great lengths to avoid mentioning Curve by name, based on function signatures BIS is using the… pic.twitter.com/LWOxopc0y5
— Mikko Ohtamaa (@moo9000) September 28, 2023
Examining The Tech Framework
The underpinning technology for this CBDC pilot sprung from Curve Finance’s repository, a decentralized finance (DeFi) juggernaut known for facilitating stablecoin transactions with minimal slippage. Curve Finance operates on an automated market maker (AMM) model, ensuring liquidity provision and price discovery, a principle that Project Mariana aimed to replicate in the CBDC landscape.
The precise endeavor was to harness this AMM model in a cross-border Forex automated market maker pilot, thereby channeling liquidity and streamlining price discovery across national borders. However, the cloak of silence from Curve Finance and Ethereum core developers about this collaboration mirrors the nascent and cautious intersection of traditional banking with decentralized finance architectures.
The data footprint on September 28 disclosed a robust $2.1 billion Total Value Locked (TVL) in Curve Finance, affirming its robust mechanism. Project Mariana’s infrastructure, co-led by the BIS, the Bank of France, and the Swiss National Bank, mirrored Curve’s architecture to attain analogous objectives.
Although the exact version of Vyper—the programming language used in coding the smart contracts—remains undisclosed, the narrative unfolds amidst a backdrop where Curve Finance had recently navigated through a hack caused by a vulnerability in Vyper, incurring a staggering loss exceeding $60 million.
Project Mariana stands as a testament to the ascendancy of blockchain, despite the silence of its DeFi collaborators. It also subtly accentuates the indispensable discourse around securing decentralized financial architectures, ensuring they are invulnerable to adversities as witnessed in Curve’s ordeal, before a mainstream institutional adoption can occur.
