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The Bank for International Settlements, with the help of the central banks of France, Singapore and Switzerland, has successfully tested cross-border trading of central bank digital currencies.
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As more countries explore issuing a CBDC at a wholesale level, Mariana wanted to test what foreign and currency settlement could look like in a world where central banks have issued a CBDC.
The Bank for International Settlements (BIS) and the central banks of France, Singapore and Switzerland have successfully tested cross-border central bank digital currency trading (wCBDC). according to a report on Thursday.
Project Mariana’s proof of concept used hypothetical wCBDCs in the Euro, Singapore Dollar and Swiss Franc between simulated financial institutions. The project was based on “a common token standard on a public blockchain that facilitates interoperability and seamless exchange of wCBDC between various local payment and settlement systems maintained by participating central banks,” according to an accompanying press release.
As more countries explore the widespread issuance of a CBDC – which would enable the settlement of interbank transfers – including countries in Europe and Asia, Project Mariana wanted to test what foreign and currency settlements could look like in a world where central banks have issued a CBDC. Banque de France said in June that wholesale CBDCs could improve cross-border payments.
“Project Mariana is a pioneer in the use of new technology for interbank foreign exchange markets. It has successfully demonstrated the feasibility of exchanging CBDC at wholesale level across borders using new concepts such as automated market makers (AMM),” says Cecilia Skingsley, Head of the BIS Innovation Hub. AMMs are an autonomous trading mechanism and were like a decentralized exchange in this experiment.
The project even used smart contacts to enable central banks to manage their wCBDC without “the need to directly operate or control the underlying platform,” the report said.
“DeFi (decentralized finance) elements tested in the project, especially automated market makers, could form the basis for a new generation of financial market infrastructures,” the press release said.
Read more: Unified Ledger for CBDCs, tokenized assets can improve the global financial system: BIS