Project Mariana

Why in news?

• The Bank for International Settlements (BIS), in collaboration with the central banks of France, Singapore, and Switzerland, has announced the successful conclusion of Project Mariana.

About Project Mariana

• Project Mariana was developed jointly by three BIS Innovation Hub centres (the Swiss, Singapore and Eurosystem Hub Centres) together with Bank of France, Monetary Authority of Singapore and Swiss National Bank.
• The project focused on testing the cross-border trading and settlement of wholesale central bank digital currencies (wCBDCs) among financial institutions, utilizing decentralized finance (DeFi) technology concepts on a public blockchain.
• The project relied on several key elements, including a common technical token standard provided by a public blockchain and bridges for seamless wCBDC transfers between different networks.
• Project Mariana demonstrated the successful cross-border trading and settlement of hypothetical euro, Singapore dollar, and Swiss franc wCBDCs among simulated financial institutions.

About Central Bank Digital Currency

• A Central Bank Digital Currency (CBDC), or national digital currency, is simply the digital form of a country’s fiat currency.Instead of printing paper currency or minting coins, the central bank issues electronic tokens. This token value is backed by the full faith and credit of the government.

About Bank for International Settlements (BIS)

• The Bank for International Settlements (BIS) is an international financial institution established in 1930.
• It is owned by 63 central banks, representing countries from around the world that together account for about 95% of world GDP.
• It aims to support central banks’ pursuit of monetary and financial stability through international cooperation, and to act as a bank for central banks.

PRACTICE QUESTION:

Consider the following statements regarding Project Mariana:

1. It was aimed at testing the cross-border trading and settlement of wholesale central bank digital currencies (wCBDCs)
2. It was conducted by World Bank

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Answer