BIS and Central Banks of France, Singapore and Switzerland Successfully Test Cross-Border CBDC Using DeFi
The Bank for International Settlements (BIS) and central banks of France, Singapore, and Switzerland have jointly announced a successful test of cross-border trading and settlement for wholesale central bank digital currencies (wCBDCs).
This test incorporated innovative decentralized finance (DeFi) technology concepts and was executed on a public blockchain.
Project Mariana, jointly developed by three BIS Innovation Hub centers - Swiss, Singapore, and Eurosystem Hub Centers, in conjunction with the Bank of France, Monetary Authority of Singapore, and Swiss National Bank, demonstrated the feasibility of cross-border trading and settlement involving hypothetical euro, Singapore dollar, and Swiss franc wCBDCs among simulated financial institutions.
The project's success hinged on three key elements:
Common Technical Token Standard: A standardized token provided by a public blockchain to facilitate interoperability and exchange between various currencies.
Bridges for Seamless Transfer: Mechanisms for frictionless transfer of wCBDCs across different networks.
Automated Market Maker (AMM): A specialized decentralized exchange enabling automatic pricing, execution, and immediate settlement of spot FX transactions.
The AMM effectively pooled liquidity from the hypothetical euro, Singapore dollar, and Swiss franc wCBDCs, utilizing innovative algorithms to price and execute spot FX transactions automatically.
This project aimed to explore next-generation financial market infrastructures designed to streamline cross-border trading and settlement processes among financial institutions.
It leverages a common token standard on a public blockchain, enabling seamless exchange and interoperability across diverse local payment and settlement
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