The Bank for International Settlements (BIS) has successfully completed Project Mariana, a collaborative endeavor with the central banks of France, Singapore, and Switzerland, aiming to explore the potential of wholesale central bank digital currencies (wCBDCs) in cross-border trading and settlement between financial institutions.
Developed jointly by three BIS Innovation Hub centers, along with the Bank of France, the Monetary Authority of Singapore, and the Swiss National Bank, the project focused on employing decentralized finance (DeFi) technology concepts on a public blockchain.
Project Mariana created a simulated environment to test cross-border trading and settlement of hypothetical wCBDCs in euro, Singapore dollar, and Swiss franc between financial institutions.
The proof of concept leaned on a common technical token standard, bridging technologies for seamless wCBDC transfers between networks and an Automated Market Maker (AMM) to facilitate immediate pricing, execution, and settlement of spot FX transactions.
The AMM for this project pooled the liquidity of the hypothetical wCBDCs, and innovative algorithms allowed transactions to be settled immediately, shedding light on the protocols that could be used by the next generation of financial market infrastructures for efficient cross-border trading and settlement.
The architecture of Project Mariana harmonized central banks’ need for domestic oversight and autonomy with the interests of financial institutions in efficient holding, transferring, and settling wCBDC across borders.
The project employed a common token standard on a public blockchain, facilitating interoperability and seamless exchange of wCBDCs across varied local payment and settlement systems.
Cecilia Skingsley, Head of the BIS Innovation Hub, highlighted the successful demonstration of exchanging wholesale CBDC across borders using innovative technology and the collaborative efforts of diverse teams across the Innovation Hub centers and central banks.
She emphasized that Project Mariana pioneers the usage of novel technology for interbank foreign exchange markets.
However, this project is purely experimental, and it does not imply that the partner banks have any intention to issue wCBDC or endorse DeFi or any specific technological solution.
It is the first cross-center project by the Innovation Hub and represents a cornerstone in the exploration of advanced solutions to improve cross-border payments, with further research and experimentation still needed.
A live demonstration of Project Mariana will be hosted by Banque de France at a conference on October 3rd, discussing the potential of wholesale CBDCs.
This project highlights the potential and feasibility of innovative solutions in a potential future dominated by tokenized assets and emphasizes the need for continuous exploration in this domain.