Today the BIS Innovation Hub announced Project Mariana, a new research initiative exploring DeFi. The participants include the Banque de France, the Monetary Authority of Singapore (MAS) and the Swiss National Bank. It will use automated market makers (AMM) for foreign exchange as part of cross border payment trials using wholesale central bank digital currency (CBDC).
In conventional exchanges, there are market makers with order books. In contrast, most decentralized exchanges use AMMs based on algorithms to automate trading with liquidity pools replacing market makers. A key advantage is the potential for 24/7 trading.
In July last year, MAS and the Banque de France used an AMM supplied by JP Morgan’s Onyx blockchain unit for cross border CBDC tests.
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