Tokenisation may be on the horizon, with the potential to change the financial system. Today, the largest financial market in the world is the foreign exchange (FX) market, trading approximately $7.5 trillion a day. How might we trade and settle FX in a future tokenised world?
In the context of the G20’s goal to improve cross-border payments, several projects have shown the feasibility of cross-border and FX transactions using wholesale central bank digital currency (wCBDC) arrangements and distributed ledger technology (DLT) platforms.
Project Mariana expands on these wCBDC experiments with the aim of improving the effectiveness, safety and transparency of FX trading and settlement. The project contributes to two key dimensions: first, it combines FX trading and settlement in cross-border transactions into a single instantaneous step using wCBDCs, as one possible mechanism for eliminating credit and settlement risk. Second, given the diversity of technological solutions used in emerging domestic CBDC arrangements, it tests cross-border interoperability through wCBDC mobility beyond domestic boundaries and with a uniform technical wCBDC standard. Interoperability may allow for flexibility in a future tokenised financial system in which central banks’ autonomy is retained in the domestic context, while avoiding walled gardens. The project thereby offers one possible approach to future-proofing the various domestic and regional wCBDC arrangements now under development.
Project Mariana is a joint proof of concept (PoC) between the BIS Innovation Hub, Bank of France, Monetary Authority of Singapore and Swiss National Bank. The project is purely experimental and does not indicate that any of the involved central banks intend to issue CBDC or endorse DeFi or a particular technological solution.
This interim report describes the Mariana experimental setup in detail.