France, Switzerland and Singapore jointly test cross-border CBDC payments

euronews.com:

France, Singapore and Switzerland have launched a joint trial of their experimental central bank digital currencies (CBDCs) and decentralised finance (DeFi) protocols, in the first cross-regional test of its kind.

The trial, named Project Mariana, explores how financial institutions could settle foreign exchange trades in financial markets using such tools, with the aim to deliver a proof of concept by mid-2023.

It will use so-called automated market makers (AMM) for the cross-border exchange of "hypothetical" Swiss franc, euro and Singapore dollar CBDCs. 

AMM protocols are designed to combine pooled liquidity with algorithms to determine the prices between two or more digitally tokenised assets such as currencies.

"In the future, similar AMM protocols could form the basis for a new generation of financial infrastructures facilitating the cross-border exchange of CBDCs," the Bank for International Settlements (BIS), which oversees the project, said in a statement.

"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".

Around 90 per cent of the world’s central banks, including the US Federal Reserve, the Bank of England and the European Central Bank, are studying the potential launch of a digital version of their currencies.

Most don’t want to be left behind by the advances of Bitcoin and other cryptocurrencies, but are grappling with the complexities they bring, such as wariness about the degree of control they could hand to governments.

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