Singapore BIS Monetary Authority and central banks of Switzerland, France explore AMMs and CBDCs

The Innovation Hub of the Bank for International Settlements (BIS) is leading a project to automate foreign exchange markets and payments using the Defi protocol to make CBDC payments through automated market makers (AMMs). according to In a November 2nd blog post.

The project, named Project Mariana, involves the Banque de France, the Swiss National Bank and the Monetary Authority of Singapore (MAS).

Experimenting with cross-border CBDC payments via AMM

The focus areas of this project are improving cross-border CBDC payments using AMM, investigating the feasibility of trans-regional networks to act as trusted hubs for cross-border payments, and conducting research on CBDC governance models.

Participants will experiment with the use of AMMs protocols to facilitate a hypothetical future wholesale CBDC in their respective countries. Instead of using traditional order books or boards to connect buyers and sellers in a consensus market environment, these AMM protocols use pre-written algorithms to aggregate pooled liquidity and smart contracts. determine and provide real-time prices between CBDC trading pairs via Reliance on 24/7 intermediaries.

BIS believes that as a result of this project, the AMM infrastructure explored throughout the project will serve as a blueprint for financial institutions to settle foreign exchange transactions and CBDC cross-border exchanges, with a proof-of-concept by mid-2023. is expected to be provided.

Project Mariana is the latest in a series of initiatives by BIS investigating cross-border CBDC exchanges and payments. In March 2021, BIS completed its first retail CBDC system project, Project Aurum. The project was carried out in collaboration with the Hong Kong Monetary Authority, which researches intermediate CBDCs and CBDC-backed stablecoins. Its architecture included a wholesale interbank system built on a blockchain with central bank-hosted DLT nodes, and a retail e-wallet system for storing and receiving CBSC tokens.

In September 2022, BIS completed its second most recent CBDC project, Project mBridge. The project successfully facilitated his $22 million worth of real value cross-border transactions between the Hong Kong Monetary Authority (HKMA) and the central banks of Thailand, China and the United States. United Arab Emirates.

Other CBDC projects by BIS include Project Dubar in March 2022 and Project Jura in December 2021. Both are ongoing research for multiple banks to leverage a common platform powered by distributed ledger technology to facilitate low-cost, fast and secure cross-border CBDCs. payment.

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