Tri-Nation Experiment: France, Singapore, and Switzerland Test Cross-Border CBDCs

The Bank for International Settlements (BIS), in collaboration with the central banks of France, Singapore, and Switzerland, has recently completed a joint trial involving the cross-border trading and settlement of wholesale central bank digital currencies (CBDCs).

The Banque de France has released a report on this initiative, known as Project Mariana, as of September 28th.

Project Mariana, developed by the Banque de France, the Monetary Authority of Singapore, and the Swiss National Bank under the guidance of the BIS, explored the cross-border exchange and settlement of hypothetical CBDCs denominated in euros, Singapore dollars, and Swiss francs.

This trial involved simulated financial institutions and leveraged decentralized finance (DeFi) technology concepts on a public blockchain.

The underlying concept of this project relied on employing a standardized token format on a public blockchain, establishing bridges for the smooth transfer of CBDCs across different networks, and utilizing a specific type of decentralized exchange to automatically execute and settle spot foreign exchange transactions.

While the participants deemed the experiment successful, they emphasized the need for additional research and experimentation.

Furthermore, it was emphasized that Project Mariana was purely experimental and did not signify any intention by the partner central banks to issue CBDCs or endorse DeFi or any specific technological solution.

The day before Project Mariana's public release, Agustín Carstens, the General Manager of the BIS, emphasized the importance of clarifying the legal frameworks in countries where central banks do not have the authority to issue CBDCs.

The BIS continues to play a central role in promoting cross-border CBDCs, with several pilot tests taking place globally. As a matter of fact, in September, the central banks of Hong Kong and Israel released the results of their Project Sela, and the Hong Kong Monetary Authority CEO, Eddie Yue, announced the expansion of Project mBridge, which already includes the central banks of China, Thailand, and the United Arab Emirates.