The Bank for International Settlements (BIS) has launched a joint project with the central banks of Singapore, France and Switzerland to integrate some decentralized finance and CBDC functions.
A team at a global banking regulator called Project Mariana will explore the use of automated market makers (AMMs) to automate foreign exchange markets, settlements, and potentially improve cross-border payments.
AMM is a type of smart contract that uses liquidity pools to automatically transfer digital assets, as opposed to the traditional process of matching buyers and sellers.
BIS representatives explain that the concept of AMM protocols can become the basis for a new generation of financial systems that facilitate the international exchange of government digital assets. The project involves the Innovation Centers of the Eurosystem, Singapore and Switzerland BIS together with the Bank of France, the Monetary Authority of Singapore (MAS) and the Swiss National Bank.
The goal of the study is to provide proof of interoperability between decentralized finance (DeFi) and CBDC functionality by mid-2023. Head of the BIS Innovation Center Cecilia Skingsley assures the importance of the project for the cooperation of stakeholders.
The Bank for International Settlements (BIS) and the central banks of Sweden, Norway and Israel joined forces last month to explore the potential for central bank digital currencies.
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