BIS and central banks of France, Singapore and Switzerland successfully test cross-border wholesale CBDCs

The Monetary Authority of Singapore (MAS) has published a press release to inform of the successful conclusion of Project Mariana which was / is a collaborative project involving the Bank for International Settlements (BIS) and the central banks of France, Singapore, and Switzerland. The project aimed to test the cross-border trading and settlement of wholesale central bank digital currencies (wCBDCs) using decentralized finance (DeFi) technology on a public blockchain.
Specifically, the project tested the trading and settlement of hypothetical euros, Singapore dollars, and Swiss franc wCBDCs using three key elements: a common technical token standard on a public blockchain, bridges for transferring wCBDCs between networks, and an Automated Market Maker (AMM) for spot FX transactions (a form of decentralized exchange). The AMM thereby pooled liquidity from different wCBDCs and used innovative algorithms to automate and settle spot FX transactions instantaneously, potentially serving as a basis for future financial market infrastructures. The use of AMMs thereby proved to be technically feasible while still meeting central bank oversight requirements and meeting the standards of the FX Global Code (FXGC). The test also showed that central banks can manage wCBDCs without the need to operate or control the underlying infrastructure, but with continuous autonomy as far as domestic payment platforms are concerned. Commercial banks could utilize wCBDCs for instantaneous FX trading and settlement, which would reduce credit and settlement risks and improve overall payment efficiency.
As the project was experimental, it does not imply that partner central banks intend to issue wCBDCs or endorse DeFi solutions. Further research and experimentation would needed for such endorsement to ensure safe and sound trading and settlement of wCBDCs.
Further information on the project and the tested architecture may be found in the enclosed report.