Today the BIS Innovation Hub published the final report on Project Mariana, a wholesale CBDC experiment for foreign exchange (FX) and cross border CBDC payments. The project used a combination of public and permissioned blockchains as well as DeFi automated market makers (AMM) to enable commercial banks to make cross border payments using wholesale CBDC (wCBDC). The central banks involved were the Banque de France, the Swiss National Bank and the Monetary Authority of Singapore (MAS).
The foreign exchange market isn’t just the largest market at $7.5 trillion daily, it’s also the one with the most settlement risk. Blockchain enables almost instant settlement or payment versus payment (PvP) which could help to address these significant risks. However, automated market makers (AMM) could increase liquidity requirements.
Project Mariana involves one bank, say in France, requesting wholesale CBDC from the central bank. The commercial bank would then use the central bank’s bridge to move the wCBDC from the permissioned domestic network onto the public blockchain. There it exchanged the digital euro for wholesale Singapore dollars using the AMM. And transferred those to the Singapore bank for onward payment.
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