Cryptocurrency News

France, Singapore and Switzerland test cross-border CBDCs

cfc9b0f2 8539 4768 a87a e615638e9547

The Bank for International Settlements (BIS) and the central banks of France, Singapore and Switzerland concluded a joint test of the cross-border trading and settlement of wholesale central bank digital currencies (CBDCs). Banque de France issued the report on Sept. 28. 

The so-called Project Mariana was developed by Banque de France, the Monetary Authority of Singapore, and the Swiss National Bank under the aegis of the Bank for International Settlements (BIS). It has tested the cross-border trading and settlement of hypothetical euro, Singapore dollar, and Swiss franc CBDCs between simulated financial institutions, using decentralized finance (DeFi) technology concepts on a public blockchain.

The concept works by using a common token standard on a public blockchain, bridges for the seamless transfer of CBDCs between different networks, and a specific type of decentralized exchange to trade and settle spot FX transactions automatically, called Automated Market Maker (AMM).

Related: BIS gives CBDCs a thumbs up, crypto the middle finger in reports to G20 ministers.

According to the release, the participants consider the experiment successful, though “further research and experimentation is needed.” It also makes a reservation about the experimental nature of Project Mariana, stating:

“Project Mariana is purely experimental and does not indicate that any of the partner central banks intend to issue CBDC or endorse DeFi or a particular technological solution.”

The day before the release of Project Mariana went public, BIS general manager Agustín Carstens spoke about the necessity to clarify the national legal frameworks in those countries where the Central Banks don’t have a right to issue CBDC. 

BIS remains the principal promoter of cross-border CBDCs, with several pilot tests being run around the globe. Thus, in September, the central banks of Hong Kong and Israel released the results of their Project Sela, while the Hong Kong Monetary Authority (HKMA) CEO Eddie Yue announced the expansion of the Project mBridge, which has already included the central banks of China, Thailand and the United Arab Emirates.