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Source: The post is based on the article “Cross-border CBDC trading: BIS and central banks successfully conclude Project Mariana Test” published in “Economic Times” on 3rd October 2023
What is the News?
The Bank for International Settlements (BIS), in collaboration with the central banks of France, Singapore, and Switzerland, has announced the successful conclusion of Project Mariana.
What is Project Mariana?
Project Mariana was developed jointly by three BIS Innovation Hub centres (the Swiss, Singapore and Eurosystem Hub Centres) together with Bank of France, Monetary Authority of Singapore and Swiss National Bank.
Purpose: The project tested the cross-border trading and settlement of wholesale central bank digital currencies (wCBDCs) between financial institutions, using new decentralized finance (DeFi) technology concepts on a public blockchain.
Process: The project relied on three key elements:
– A common technical token standard provided by a public blockchain to facilitate exchange and interoperability between the different currencies.
– Bridges for the seamless transfer of wCBDCs between different networks.
– An Automated Market Maker (AMM), which is a specific type of decentralized exchange to trade and settle spot Foreign exchange(FX) transactions automatically.
What is the Bank for International Settlements(BIS)?
The Bank for International Settlements(BIS) is an international financial institution established in 1930.
It is owned by 63 central banks, representing countries from around the world that together account for about 95% of world GDP.
Aim: To support central banks’ pursuit of monetary and financial stability through international cooperation, and to act as a bank for central banks.
Head office: Its head office is in Basel, Switzerland and it has two representative offices: in Hong Kong SAR and in Mexico City.
