The Bank for International Settlements (BIS), in collaboration with the central banks of France, Singapore, and Switzerland, tested a Mariana system for cross-border trading of wholesale central bank digital currencies (wCBDC) using DeFi concepts.
Project Mariana was a collaborative effort involving three BIS Innovation Hub centers, namely the Swiss, Singapore, and Eurosystem Hub Centers, along with the participation of the Bank of France, the Monetary Authority of Singapore, and the Swiss National Bank. It borrows ideas and concepts from DeFi and leverages a public blockchain to design and test a transnational FX interbank market using wCBDCs.
The Banque de France developed the so-called Automated Market Maker (AMM), a DeFi app, on a public blockchain. This made it possible for banks to easily buy and sell virtual currencies like the euro, Singapore dollar, and Swiss franc.
The experiment worked, but it’s essential to remember that this was an experiment, and that doesn’t mean CBDCs or DeFi technology are going to be adopted right now by any of the partner central banks.
Before this trial, the general manager of BIS, Agustín Carstenshad, stressed the need to define digital currency laws, especially in jurisdictions where central banks cannot have their own digital currency.
BIS wants digital currencies to work cross-border and is running similar tests in other areas, including Hong Kong and Israel.