BIS and central banks of France, Singapore and Switzerland successfully test cross-border wholesale CBDCs.
Major progress was made recently in the development of central bank digital currencies (CBDCs) as the Bank for International Settlements collaborated with the central banks of France, Singapore and Switzerland on a project testing the cross-border use of CBDCs between financial institutions.
The project, dubbed "Mariana," demonstrated the feasibility of using wholesale CBDCs (wCBDCs) denominated in euros, Singapore dollars, and Swiss francs to conduct cross-border trading and settlement. According to a report by MAS, the proof of concept was successful, representing a big step forward for CBDCs.
The goal was to explore how wCBDCs could potentially improve cross-border payments and settlements by reducing costs and time, boosting transparency, and making the financial system more efficient overall. The project also examined using decentralized finance (DeFi) protocols to facilitate international trading and settlement.
Mariana utilized a distributed ledger technology platform to enable the cross-border use of wCBDCs while safeguarding the privacy, integrity and availability of data and transactions. Interoperability between different platforms and integration with legacy systems were also tested.
“In a potential future with tokenized assets, safe and efficient pricing and exchange mechanisms for cross-currency transactions remain essential. Project Mariana demonstrates the feasibility of such an infrastructure in an innovative way,” says Thomas Moser, Alternate Member of the Governing Board of the Swiss National Bank.
With the successful demonstration of cross-border wCBDC transactions, central banks worldwide are one step closer to adopting CBDCs. As digital versions of fiat currency issued and backed by central banks, CBDCs have the capacity to help TradFi by offering a secure, efficient, inclusive payment and settlement method. The BIS and participating central banks plan to continue collaborating on CBDCs and exploring potential applications.
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