A partnership between the Bank of International Settlement and the central banks of France, Singapore, and Switzerland, “Project Mariana” intends to use DeFi protocols to automate foreign exchange markets and settlement.
This includes using DeFi protocols to stimulate the hypothetical exchange of cross-border transactions between the Swiss franc, euro and Singapore dollar wholesale central bank digital currencies, or CBDCs. The technologies involved in building Project Mariana include smart contracts and automated market maker protocols, or AMMs.
As an organization created by central banks to regulate the international financial framework, BIS wrote that “AMM protocols could form the basis for a new generation of financial infrastructures facilitating the cross-border exchange of CBDCs.” Cecilia Skingsley, head of the innovation hub at BIS, added:
“This pioneering project pushes our CBDC research into innovative frontiers, incorporating some of the promising ideas of the DeFi ecosystem. Mariana also marks the first collaboration across Innovation Hub Centres; expect to see more in the future.” BIS and the collaborating central banks have set a tentative date of mid-2023 for delivering a proof-of-concept. The financial institution wasdue to their inherent price variance and lack of a unified regulatory framework. Nevertheless, BIS has praised elements of distributed ledger networks, such as their technological prowess relative to fiat money. According to a recent report authored by BIS, 90% of central banks worldwide are currently researching the utility of CBDCs.
Update : This article has been updated to correct the spelling of the Bank for International Settlements and to correct a quote taken from its announcement.
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