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The Bank of International Settlements (BIS) has announced the launch of a new project in collaboration with the central banks of Singapore, France, and Switzerland to explore the integration of central bank digital currencies (CBDCs) with decentralised finance (DeFi) services.
According to a press release on Wednesday, Project Mariana will use DeFi protocols to automate foreign exchange markets and settlement. It will explore using Automated Market Makers (AMMs) for the cross-border exchange of hypothetical Singapore dollar, Swiss franc, and euro CBDCs, with the aim of delivering a proof-of-concept by mid-2023.
The BIS also added that AMMs have the potential to form “the basis for a new generation of financial infrastructure.”
Read more: Does Singapore Need a Retail CBDC? MAS Says No But Commences Trials
“This pioneering project pushes our CBDC research into innovative frontiers, incorporating some of the promising ideas of the DeFi ecosystem,” said Cecilia Skingsley, head of the BIS Innovation Hub.
“Mariana also marks the first collaboration across Innovation Hub Centres; expect to see more in the future,” she added.
Previously, the BIS said dubbed DeFi as an “illusion,” and that centralisation was “inevitable”. Last week, they published a report on its mBridge pilot project examining CBDC cross-border payments in collaboration with the central banks of Hong Kong, Thailand, China, and the United Arab Emirates.
