MAS teams up with BIS, Swiss and France central banks to test wholesale CBDCs

Project Mariana used DeFi technology concepts on a public blockchain.

The Monetary Authority of Singapore has teamed up with the Bank for International Settlements (BIS) and central banks in France and Switzerland to test cross-border trading and settlement of wholesale central bank digital currencies (CBDCs) between financial institutions.

Project Mariana was jointly developed by three BIS Innovation Hub centres (the Swiss, Singapore, and Eurosystem hub centres) together with MAS, Bank of France, and the Swiss National Bank. The proof of concept was successfully tested using cross-border trading and settlement of a hypothetical euro, Singapore dollar, and Swiss franc.

The project made use of new decentralized finance (DeFi) technology concepts on a public blockchain, and relied on three 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 FX transactions automatically.

“As tokenisation and DeFi technologies are still nascent, further research and experimentation is needed. The BIS Innovation Hub and its global partners will continue exploring their benefits and challenges based on relevant use cases,” MAS and its partners said in a joint media release.

MAS added that the project should be considered purely experimental and does not indicate that any of the partner central banks intend to issue wCBDC or endorse DeFi or a particular technological solution.

“The project explored how multi-currency settlement may be performed atomically, while maintaining the independence of respective domestic settlement systems,” said Sopnendu Mohanty, Chief FinTech Officer, MAS.

“In addition, this collaboration enables central banks to explore and better understand the policy, governance and technical implications of using automated market markers to facilitate foreign exchange,” Mohanty added.

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