The Bank for International Settlements alongside the central banks of France, Singapore and Switzerland tested out using wholesale CBDC to conduct cross border trading.
The Bank for International Settlements with the help from the central banks of France, Singapore and Switzerland successfully tested out cross border trading of wholesale central bank digital currencies.
With more and more nations exploring issuing a wholesale CBDC Project Mariana wanted to test out how foreign and exchange settlement might look in a world where central banks have issued a CBDC.
The Bank for International Settlements (BIS) and the central banks of France, Singapore and Switzerland successfully tested out cross-border trading of wholesale central bank digital currencies (wCBDC), according to a report on Thursday.
Project Mariana’s proof of concept used a hypothetical euro, Singapore dollar and Swiss franc wCBDCs between simulated financial institutions. The project relied on “a common token standard on a public blockchain which facilitates interoperability and seamless exchange of wCBDC across varied local payment and settlement systems maintained by participant central banks,” an accompanying press release said.
With more and more nations exploring issuing a wholesale CBDC – which enable the settlement of interbank transfers – including countries in Europe and Asia, Project Mariana wanted to test out how foreign and exchange settlement might look in a world where central banks have issued a CBDC. Banque de France said in June that wholesale CBDC’s could improve cross border payments.
“Project Mariana pioneers the use of novel technology for interbank foreign exchange markets. It successfully demonstrated that it is feasible to exchange wholesale CBDC across borders using novel concepts such as automated market makers (AMM),” said Cecilia Skingsley, Head of the BIS Innovation Hub. AMM’s are an autonomous trading mechanism and in this experiment was like a decentralised exchange.
The project even used smart contacts to enable central banks to manage their wCBDC without “the need to directly operate or control the underlying platform,” the report said.
“DeFi (decentralised finance) elements tested in the project, specifically automated market makers, could form the basis for a new generation of financial market infrastructures,” the press release said.
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Source: Vietnam Insider