Global Trustee and Fiduciary Services Bite-Sized Issue 10 2023

CBDC Project Mariana: Cross-border Exchange of Wholesale CBDCs Using Automated Market-makers On 28 September 2023 the Bank for International Settlements (BIS) Innovation Hub published its final report on Project Mariana, a proof of concept (PoC) for a global interbank market for spot FX featuring both an automated market-maker (AMM) and wholesale central bank digital currencies (wCBDCs). In the PoC, wCBDCs circulate on domestic platforms and so-called bridges allow them to be moved on to a transnational network that hosts the AMM. Project Mariana explores how the future of FX trading and settlement could look in a world where central banks have issued CBDCs, and financial market infrastructures include elements of decentralised finance (DeFi). The Mariana proof of concept demonstrates technical feasibility of AMMs for cross-border trading and settlement of hypothetical Swiss franc, euro and Singapore dollar wCBDCs. It borrows ideas and concepts from DeFi and leverages a public blockchain to design and test a transnational FX interbank market using wCBDCs. Project Mariana is a collaboration between the BIS Innovation Hub, the Bank of France, the Monetary Authority of Singapore and the Swiss National Bank. The project is purely experimental and does not indicate that any of the involved central banks intend to issue a CBDC or endorse DeFi or a particular technological solution. Link to Report here Project Sela Demonstrates that Retail CBDC can Support Access, Cyber Security and Competition, While Retaining Cash Features On 12 September 2023 the BIS Innovation Hub published a report on Project Sela, a joint experiment by the BIS and the central banks of Hong Kong SAR and Israel, detailing the feasibility of a retail central bank digital currency (rCBDC) ecosystem that combines accessibility, competition and preventative cyber security, while retaining key advantages of physical cash. The project, coordinated by the BIS Innovation Hub Hong Kong Centre, leverages the Bank of Israel’s cyber security expertise and ongoing work on the digital shekel and the Hong Kong Monetary Authority’s (HKMA) learnings from Projects Aurum and e-Hong Kong Dollar, as well as other Innovation Hub experiments on rCBDCs. A key policy goal of Sela was to promote an accessible, competitive and innovative rCBDC ecosystem that can serve a wide range of use cases. As such, it aimed to lower the barriers to entry for service providers and unbundle and redistribute the activities related to rCBDC accounts among public and private actors. Another important goal was to achieve a digital means of payment which preserves desirable attributes of cash, like being free from credit risk; is widely accessible and a safe means of payment and store of value; provides instant settlement; operates at a low cost; and maintains an appropriate level of privacy for end users. Securities Services Bite-Sized Global Trustee and Fiduciary Services Issue 10 | 2023 QUICK LINKS CBDC DIVERSITY & INCLUSION FINTECH FUND LIQUIDITY OPERATIONAL RESILIENCE SUSTAINABLEFINANCE/ESG ASIA EUROPE LUXEMBOURG NORTH AMERICA UNITED KINGDOM

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