To facilitate international trade, the Bank for International Settlements and the central banks of France, Singapore, and Switzerland conducted pilot projects utilizing wholesale CBDC.
The Bank for International Settlements tried trading of market central bank digital currencies across borders with help from the central banks of France, Singapore, and Switzerland. The tests went well.
Project Mariana aimed to simulate how international and exchange settlement may operate in a world where central banks have issued a CBDC, since more and more countries are considering doing so.
A study released Thursday said that the Bank for International Settlements (BIS) and the central banks of France, Singapore, and Switzerland were able to trade wholesale central bank digital currencies (wCBDC) across borders.
Proof-of-concept testing for Project Mariana used fictitious wCBDCs denominated in euros, Singapore dollars, and Swiss francs between mock financial institutions. According to the news release, “a common token standard on a public blockchain” was used to make it possible for wCBDC to be freely traded across different central banks in different countries with different payment and settlement systems.
Project Mariana aimed to simulate the foreign and exchange settlement in a world where central banks have issued a CBDC, since more and more countries, particularly in Europe and Asia, are considering issuing a wholesale CBDC to facilitate the settlement of interbank transfers. In June, the Banque de France suggested that wholesale CBDCs would enhance international money transfers.
The interbank foreign exchange markets have never seen anything like the cutting-edge technology used by Project Mariana. BIS Innovation Hub Head Cecilia Skingsley praised the initiative for “effectively demonstrating that it is conceivable to trade wholesale CBDC across borders utilizing innovative ideas such as automated market makers (AMM). Autonomous trading mechanisms (AMMs) were used in this experiment to simulate a decentralized trading platform.