BIS and Central Banks Achieve Milestone with Effective CBDC Trial in Project Mariana

The Bank for International Settlements (BIS), along with the central banks of France, Singapore, and Switzerland, has recently declared the successful conclusion of a new CBDC initiative known as Project Mariana.

This initiative examined cross-border trading and settlement of wholesale central bank digital currencies (wCBDCs) among financial institutions.

BIS and Central Banks Collaborate on CBDC Test

According to reports, this innovative project utilizes the principles of Decentralized Finance (DeFi) technology on a public blockchain, potentially heralding a new era in the realm of digital currencies.

This collaboration among BIS Innovation Hub centers in Switzerland, Singapore, and the Eurosystem, along with Banque de France, Monetary Authority of Singapore, and Swiss National Bank, has effectively validated the trading and settlement of theoretical euro, Singapore dollar, and Swiss franc wCBDCs.

Throughout the process, discussions took place regarding essential elements, such as the establishment of a standardized technical token and the creation of bridges to enable smooth wCBDC transfers. Additionally, the group of central banks explored the Automated Market Maker (AMM) concept, which facilitates automatic pricing and execution of spot FX transactions.

The integration of DeFi technology, including automated market makers, could lead to a new generation of financial market infrastructures. The architecture of Project Mariana balances the domestic oversight needs of central banks with the interests of financial institutions in efficiently holding, transferring, and settling wCBDC across borders.

Nonetheless, reports indicate that this is only an experimental stage. BIS plans to further explore the opportunities and challenges associated with CBDC and its related technologies in partnership with its collaborators. While engaging with key banking counterparts, partner central banks must express their intention to issue wCBDC or support DeFi.

Commenting on these developments, the Director General for Financial Stability and Operations at Banque de France, Emmanuelle Assouan, stated:

“Mariana is a novel experiment in several aspects. We have developed a practical solution to exchange multi-CBDCs in a global network interoperable with regional platforms on which the CBDC of each jurisdiction is issued. This could be a forerunner for the functioning of cross-border payments in the future.”

Despite the advancements, tokenization and DeFi technologies are still in their early stages, necessitating further research. Mariana serves as a foundational element in enhancing cross-border payments and is expected to be highlighted at the Banque de France conference on Oct. 3.

Building on Last Year’s Success

Just last year, BIS partnered with several other central banks from Hong Kong SAR, Thailand, mainland China, and the United Arab Emirates to complete a cross-border digital currency pilot.

According to reports, the mBridge involved approximately 20 banks executing 164 payment and foreign exchange transactions over six weeks, with transactions surpassing $22 million settled directly on the mBridge platform.

This year’s participation in the CBDC test signifies further progress towards utilizing blockchain for settlements by the BIS. However, documentation indicates that additional experiments and trials will persist.

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