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The Bank for International Settlements (BIS) has launched a new project with the central banks of Singapore, France and Switzerland to study the possibility of integrating certain decentralized finance (DeFi) functionalities with central bank digital currencies (CBDCs). .

See related articles: mBridge participants will end domestic payments from foreign CBDCs

Fast facts

  • The BIS announced Wednesday a new “Project Mariana” which will investigate the use of Automated Market Makers (AMMs) to automate foreign exchange markets and settlement, and potentially improve cross-border payments.
  • According to the BIS, an AMM is a type of smart contract that adopts pools of liquidity to automatically transfer digital assets, as opposed to the traditional process of matching buyers and sellers.
  • “As DeFi and its applications have the potential to become systemically important parts of the financial ecosystem, central banks need to understand their impact on cross-border payments,” the BIS said. said.
  • The BRI explained that the concept of such AMM protocols could form the basis of a new generation of financial infrastructure facilitating cross-border exchanges of CBDCs.
  • The BRI last week published a report on its mBridge pilot project examining cross-border CBDC payments in collaboration with central banks in Thailand, China, United Arab Emirates and Hong Kong.

See related articles: BRI’s mBridge shows CBDCs improve cross-border payment efficiency: HKMA

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