The Bank for International Settlements (BIS) and the central banks of France, Singapore and Switzerland have successfully concluded the Mariana project. This project made it possible to experiment with the use of new technological approaches from decentralized finance (DeFI) to carry out and settle on a blockchain publicity of cross-border transactions in wholesale central bank digital currencies (CBNCs) between financial institutions.
- The Mariana project made it possible to experiment with the execution and settlement of cross-border wholesale MNBC transactions
- Success in using hypothetical wholesale MNBCs in Swiss francs, euros and Singapore dollars
- Elements of DeFi tested in the project could form the basis of a new generation of financial market infrastructures
The Mariana project was jointly developed by three centers of the BIS Innovation Hub (the Swiss, Eurosystem and Singapore centers) with the Banque de France, the Monetary Authority of Singapore (AMS) and the National Bank Switzerland (NBS).
The feasibility study carried out in this context confirmed the success of using hypothetical wholesale MNBCs in Swiss francs, euros and Singapore dollars to carry out and settle cross-border transactions between fictitious financial institutions. The process was based on three elements:
- a common technical standard of tokens provided by a blockchain public, intended to facilitate the exchange and interoperability between different currencies;
- bridges to seamlessly transfer wholesale MNBC between different networks;
- an automated market maker (AMM), which is a specific type of decentralized platform for automatically trading and settling spot foreign exchange transactions.
AMM protocols combine the creation of liquidity pools with the use of innovative algorithms to determine the price at which at least two tokenized assets are exchanged. These protocols could form the basis of a new generation of financial market infrastructures facilitating cross-border payments between financial institutions.
The Mariana Project architecture balances the needs for supervision and autonomy of central banks within their jurisdiction with the interest of financial institutions to efficiently hold, transfer and settle wholesale MNBC across borders.
The project introduces a modular, interoperable and flexible approach to wholesale MNBC trading in a hypothetical tokenized financial system. Mariana thus makes it possible to consider approaches integrating an international dimension to current developments relating to the design of wholesale MNBC.
Given the still embryonic nature of technologies linked to tokenization and decentralized finance, it is appropriate to deepen research and experimentation in this area. The BIS Innovation Hub and its country partners will continue to explore opportunities and challenges, based on relevant use cases.
A purely experimental project, Mariana does not assume the intention of the central banks involved to issue a wholesale MNBC, nor to endorse decentralized finance or any particular technological solution. This is the first project involving several centers led by the BRI Innovation Hub.
“The Mariana project is a unique experiment in several respects: we have developed a practical solution to exchange multi-MNBC within a global network interoperable with the regional platforms on which the MNBC of each jurisdiction is issued; this solution could be a precursor in the functioning of cross-border payments in the future. The Mariana Project also provides an in-depth analysis of the possibilities that automated market makers can open up for a DLT-based foreign exchange market. There remain many avenues to explore to improve cross-border payments: Mariana constitutes the cornerstone of the ambition of public authorities in this area. The Banque de France will have the pleasure of presenting a live demonstration of the Mariana project during its conference on the potential of wholesale MNBCs which will be held on October 3. declared Emmanuelle Assouan, Director General of Financial Stability and Operations at the Banque de France.
The report is available on the site of the Bank of France.
About the Banque de France
An independent institution, the Banque de France has three major missions: monetary strategy, financial stability, and services to the economy and society. It helps define the monetary policy of the euro zone and implements it in France; it controls banks and insurance companies and ensures risk management; it offers numerous services to businesses and individuals.
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