The BIS investigates the integration of DeFi technology into foreign currency markets

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  • The Innovation Hub of the Bank for International Settlements (BIS) has announced the launch of a new project aimed at investigating central bank digital currencies (CBDC) and decentralized finance (DeFi) protocols.

The new initiative is called “Project Mariana” and involves the central banks of France, Singapore and Switzerland. This project aims to research an automated market maker (AMM) for cross-border trading of fictitious wholesale CBDCs in Swiss francs, euros and Singapore dollars.

The BIS said it would “explore the possibility among financial institutions to settle foreign exchange transactions in financial markets.”

To complete the project, the Eurosystem, Singapore and his BIS Innovation Hub Center in Switzerland will work with the Bank of France, the Monetary Authority of Singapore and the Swiss National Bank to deliver a proof of concept by mid-2023.

“In the future, a similar AMM protocol could form the basis of a new generation of financial infrastructure that facilitates cross-border CBDC exchanges,” said the BIS.

“Project Mariana has the potential to use his DeFi protocol to automate FX markets and payments and enhance cross-border payments,” he said. One of the main focuses of this research is AMMs, which combine pooled liquidity with innovative algorithms to determine prices between two or more tokenized assets.

The overall goal of this project is to study the integration of his DeFi technology into the traditional financial system to improve efficiency.

“This ground-breaking project will push CBDC research to a revolutionary frontier, integrating some of the most promising ideas in the DeFi ecosystem,” said BIS Innovation, head of her hub. “Mariana is also the first collaboration between her centers at Innovation Hub, and we hope to see more in the future,” she added.

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