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CBDC: Three Central Banks test pilot CBDC project for cross border payments

In a new pilot project, the central banks of France, Singapore, and Switzerland are collaborating in a joint test of their CBDCs and DeFi protocols.

Central Bank Digital Currencies (CBDC) have slowly enjoyed adoption among several central banks globally.

In a new pilot project, the central banks of France, Singapore, and Switzerland are collaborating in a joint test of their CBDCs and DeFi protocols.

CBDC project Mariana tested

The Bank for International Settlements (BIS) and Central banks of France, Singapore, and Switzerland have jointly announced a successful test of cross-border trading and settlement CBDC.

The project, called Project Mariana, was jointly developed by three BIS Innovation Hub Centers—Swiss, Singapore, and Eurosystem Hub Centers, in conjunction with the Banque dé France (Bank of France), Monetary Authority of Singapore (MAS), and the Swiss National Bank.

The MAS released a joint report on September 28 noting that the cross-border test used decentralised finance (DeFi) technology concepts on a public blockchain.

“As tokenisation and DeFi technologies are still nascent, further research and experimentation is needed. The BIS Innovation Hub and its global partners will continue exploring their benefits and challenges based on relevant use cases,” MAS and its partners said in a joint media release.

Project Mariana was purely an experimental project and doesn’t mean that any of the banks involved intends to issue a wholesale CBDC or endorse a DeFi payment solution.

“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 statement said.

Read more: CBDC Anti-Surveillance Bill approved by House Committee

Tech tested

The pilot project used a common technical token standard provided by a public blockchain to facilitate exchange and interoperability between the different currencies involved.

Bridges were also involved for seamless transfers between networks. And a decentralised Automated Market Maker (AMM) was used for exchange and trade for settlement of FX transactions automatically.

The project looked mainly into how multi-currency settlement could be done on the blockchain.

“The project explored how multi-currency settlement may be performed atomically, while maintaining the independence of respective domestic settlement systems,” said Sopnendu Mohanty, Chief FinTech Officer, MAS.

With several pilot projects being conducted all around the world, the BIS continues to serve as the primary advocate for cross-border CBDCs. In September, the central banks of Israel and Hong Kong published the findings of their Project Sela studies, and Eddie Yue, the CEO of the Hong Kong Monetary Authority, announced the expansion of the Project mBridge, which already involved the central banks of China, Thailand, and the United Arab Emirates.

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