BIS and central banks of France, Singapore and Switzerland to explore cross-border CBDC trading and settlement using DeFi protocols

Press release  | 
02 November 2022
  • Project Mariana will use DeFi protocols to automate foreign exchange markets and settlement.
  • Automated market makers can become the basis for new generation of financial infrastructure.
  • Exploration on cross-border exchange of wholesale CBDCs is the first to involve three Hub centres.

The BIS Innovation Hub is launching a new project around central bank digital currencies (CBDCs) and Decentralised Finance (DeFi) protocols as part of its 2022 work programme.

Project Mariana explores automated market makers (AMM) for the cross-border exchange of hypothetical Swiss franc, euro and Singapore dollar wholesale CBDCs. It will seek to examine the potential between financial institutions to settle foreign exchange trades in financial markets.

The project involves the Eurosystem, Singapore and Switzerland BIS Innovation Hub Centres together with the Bank of France, Monetary Authority of Singapore and Swiss National Bank. The aim is to deliver a proof of concept by mid-2023.

Project Mariana uses DeFi protocols to automate foreign exchange markets and settlement, potentially improving cross-border payments (and supporting a priority of the Group of 20). Today, DeFi built on public blockchains uses smart contract protocols to automate markets for crypto and digital assets. AMM protocols combine pooled liquidity with innovative algorithms to determine the prices between two or more tokenised assets. In the future, similar AMM protocols could form the basis for a new generation of financial infrastructures facilitating the cross-border exchange of CBDCs.

"This pioneering project pushes our CBDC research into innovative frontiers, incorporating some of the promising ideas of the DeFi ecosystem" said Cecilia Skingsley, Head of the BIS Innovation Hub. "Mariana also marks the first collaboration across Innovation Hub Centres; expect to see more in the future," she added.