- The Bank for International Settlements (BIS) and the central banks of France, Singapore, and Switzerland jointly announce the successful execution of Project Mariana, testing cross-border trading and settlement of wholesale central bank digital currencies (wCBDCs).
- Leveraging Decentralized Finance (DeFi) technology on a public blockchain, this collaborative initiative ushers in new possibilities for digital currency trading and financial market infrastructures.
A New Dawn in Digital Currency Trading
Project Mariana stands as a beacon of progress in the evolving landscape of central bank digital currencies (CBDCs). Spearheaded by the Bank for International Settlements (BIS) and partnered with the central banks of France, Singapore, and Switzerland, the project delved into the realm of cross-border trading and settlement of wholesale CBDCs (wCBDCs) between various financial institutions.
The framework of Project Mariana is drawn upon the robust foundations of Decentralized Finance (DeFi) technology deployed on a public blockchain. This avant-garde collaboration entailed the adept minds from BIS Innovation Hub centers in Switzerland, Singapore, the Eurosystem, along with Banque de France, Monetary Authority of Singapore, and Swiss National Bank. Together, they’ve validated the trading and settlement of hypothetical euro, Singapore dollar, and Swiss franc wCBDCs.
Key discussions were ignited regarding elemental facets such as the creation of a standardized technical token and architecting bridges to assure seamless wCBDC transfers. The consortium also explored the Automated Market Maker (AMM) concept, which is pivotal for enabling automatic pricing and execution of spot FX transactions. This inclusion of DeFi technology, particularly automated market makers, heralds the dawn of a new generation of financial market infrastructures.
Project Mariana strikes a delicate balance, addressing the central banks’ domestic oversight necessities whilst catering to the financial institutions’ keen interests in efficiently handling, transferring, and settling wCBDCs across borders.
Despite being in the experimental phase, the strides made are significant. BIS envisages delving deeper into the potential opportunities and challenges tethered to CBDC and its sibling technologies in cahoots with its partners.
The foresight echoed by Emmanuelle Assouan, the Director General for Financial Stability and Operations at Banque de France, underscores Mariana as a seminal experiment in advancing practical solutions for exchanging multi-CBDCs in a globally networked framework. This experiment, aligning with the previous successes like the mBridge venture, emblemizes the steadfast resolve towards refining cross-border payments, with the saga set to continue unfolding at the Banque de France conference on October 3.
The ongoing dialogues, trials, and explorations championed by BIS and the global central banks encapsulate a collective ambition, setting a precedent for future CBDC endeavors, thereby catalyzing the transformation of digital currency operations and cross-border settlements.