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News

CBDC Cross-border Testing Completed With Blockchain Technology To Minimize FX Risk

September 28, 2023 - Around 2 mins mins to read

Key Points:

  • BIS and central banks achieve successful CBDC cross-border testing with DeFi and public blockchain.
  • Project Mariana’s report highlights blockchain’s role in reducing FX settlement risks.
  • The experiment’s innovative approach sets the stage for enhanced cross-border digital currency transactions.
In a landmark achievement for the world of digital finance, the Bank for International Settlements (BIS), in collaboration with the central banks of France, Singapore, and Switzerland, has announced the successful completion of a test on cross-border trading and settlement for wholesale central bank digital currencies (wCBDCs).
CBDC Cross-border Testing Completed To Minimize FX Settlement Risk
CBDC Cross-border Testing Completed With Blockchain Technology To Minimize FX Risk 2

Central Banks Triumph in CBDC Cross-border Testing with DeFi Technology

The CBDC cross-border testing, known as Project Mariana, not only marked a significant stride in financial technology but also harnessed the potential of decentralized finance (DeFi) technology concepts. Importantly, the test was executed on a public blockchain, introducing a new era of transparency and efficiency in cross-border transactions.

In practice, the CBDC cross-border testing showcased a seamless process, wherein a commercial bank in one country, for instance, France, requested wholesale CBDC from its central bank.

Subsequently, the commercial bank leveraged the central bank’s bridge to transfer wCBDC onto the public blockchain. There, the digital euro was exchanged for wholesale Singapore dollars using the automated market makers (AMM) before being transferred to the Singapore bank for onward payment.

Project Mariana Helps FX Settlement Risk Mitigation

Project Mariana’s final report, published today by the BIS Innovation Hub, detailed its wholesale CBDC experiment for foreign exchange (FX) and cross-border CBDC payments.

It involved a combination of both public and permissioned blockchains and integrated DeFi AMM into the process. The central banks that played a pivotal role in this experiment were the Banque de France, the Swiss National Bank, and the Monetary Authority of Singapore (MAS).

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

BIS

CBDC

CBDC Cross-border Testing

France

singapore

Switzerland

wCBDC

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Author

Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.
News

CBDC Cross-border Testing Completed With Blockchain Technology To Minimize FX Risk

Key Points:

  • BIS and central banks achieve successful CBDC cross-border testing with DeFi and public blockchain.
  • Project Mariana’s report highlights blockchain’s role in reducing FX settlement risks.
  • The experiment’s innovative approach sets the stage for enhanced cross-border digital currency transactions.
In a landmark achievement for the world of digital finance, the Bank for International Settlements (BIS), in collaboration with the central banks of France, Singapore, and Switzerland, has announced the successful completion of a test on cross-border trading and settlement for wholesale central bank digital currencies (wCBDCs).
CBDC Cross-border Testing Completed To Minimize FX Settlement Risk
CBDC Cross-border Testing Completed With Blockchain Technology To Minimize FX Risk 4

Central Banks Triumph in CBDC Cross-border Testing with DeFi Technology

The CBDC cross-border testing, known as Project Mariana, not only marked a significant stride in financial technology but also harnessed the potential of decentralized finance (DeFi) technology concepts. Importantly, the test was executed on a public blockchain, introducing a new era of transparency and efficiency in cross-border transactions.

In practice, the CBDC cross-border testing showcased a seamless process, wherein a commercial bank in one country, for instance, France, requested wholesale CBDC from its central bank.

Subsequently, the commercial bank leveraged the central bank’s bridge to transfer wCBDC onto the public blockchain. There, the digital euro was exchanged for wholesale Singapore dollars using the automated market makers (AMM) before being transferred to the Singapore bank for onward payment.

Project Mariana Helps FX Settlement Risk Mitigation

Project Mariana’s final report, published today by the BIS Innovation Hub, detailed its wholesale CBDC experiment for foreign exchange (FX) and cross-border CBDC payments.

It involved a combination of both public and permissioned blockchains and integrated DeFi AMM into the process. The central banks that played a pivotal role in this experiment were the Banque de France, the Swiss National Bank, and the Monetary Authority of Singapore (MAS).

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.