Successful Test of Cross-Border CBDC Trading

The Bank for International Settlements (BIS) and the central banks of France, Singapore, and Switzerland have concluded a joint test of the trading and settlement of wholesale central bank digital currencies (CBDCs) across international borders.

On September 28th, the Banque de France released the report. Under the supervision of the BIS, the Banque de France, the Monetary Authority of Singapore, and the Swiss National Bank developed the so-called Project Mariana.

It has tested the cross-border trading and settlement of notional euro, Singapore dollar, and Swiss franc CBDCs between simulated financial institutions using decentralized finance (DeFi) technology concepts on a public blockchain.

Using a common token standard on a public blockchain, bridges for the seamless transfer of CBDCs between different networks, and a specific form of decentralized exchange, spot foreign exchange transactions can be traded and settled automatically.

According to the release, the experiment was deemed a triumph by the participants, but “further research and experimentation are required.”

It also expresses skepticism regarding the experimental nature of Project Mariana, stating:

“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 day before Project Mariana was released to the public, BIS general manager Agustn Carstens spoke about the need to clarify the national legal frameworks in countries where central banks do not have the authority to issue CBDC.

The BIS continues to be the primary proponent of cross-border CBDCs, with several pilot experiments being conducted worldwide.

Thus, in September, the central banks of Hong Kong and Israel disclosed the results of their Project Sela, and the CEO of the Hong Kong Monetary Authority, Eddie Yue, announced the expansion of Project mBridge, which already included the central banks of China, Thailand, and the United Arab Emirates.