Today the Bank for International Settlements (BIS) published an interim report on Project Mariana, a wholesale central bank digital currency (CBDC) trial involving the central banks of France, Singapore and Switzerland. In the proof of concept, commercial banks could transact with wholesale CBDC for foreign exchange transactions.
While the central banks each issued their CBDC on permissioned Ethereum blockchains, the international platform for foreign exchange (FX) transactions was the public Ethereum testnet (Sepolia). However, the report had a caveat that this should not be seen as an endorsement of DeFi or particular solutions.
Stepping back to the motivations, central banks have conducted numerous CBDC trials, but cross border CBDC and FX are both topics receiving significant attention. Cross border payments are too expensive, slow and unpredictable, and there’s a desire to see CBDC address these challenges. By using DeFi, 24/7 transactions are potentially feasible.
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