Bank of France (representing the Eurosystem), Bank of Japan, Bank of Korea, Bank of Mexico, Swiss National Bank, Bank of England and the Federal Reserve Bank of New York will seek to work in partnership with a large group of private financial firms convened by the Institute of International Finance (IIF). 

Project Agorá builds on the unified ledger concept proposed by the BIS and will investigate how tokenised commercial bank deposits can be "seamlessly integrated with tokenised wholesale central bank money in a public-private programmable core financial platform."

According to BIS, this could "enhance the functioning of the monetary system and provide new solutions using smart contracts and programmability, while maintaining its two-tier structure." 

The BIS will issue a call for expressions of interest to private financial institutions to join Project Agorá. 

Under MAS’ Project Guardian, MAS collaborated with 15 financial institutions to carry out industry pilots on asset tokenisation in fixed income, foreign exchange, and asset management products. These pilots demonstrated the potential to "reap significant market and transaction efficiencies from the use of tokenisation". 

MAS said that as the pilots grow in scale, there is a need for "closer cross-border collaboration among policymakers and regulators." The regulator has therefore established a Project Guardian policymaker group comprising the FSA, FCA and FINMA . 

The policymaker group will aim to:

a) advance discussions on legal, policy and accounting treatment of digital assets;

b) identify potential risks and possible gaps in existing policies and legislation relevant to tokenised solutions;

c) explore the development of common standards for the design of digital asset networks and market best practices across various jurisdictions;

d) promote high standards of interoperability to support cross-border digital assets development;

e) facilitate industry pilots for digital assets through regulatory sandboxes, where applicable; and

f) promote knowledge sharing among regulators and industry. 

Leong Sing Chiong, Deputy Managing Director (Markets and Development) at MAS, said the partnership "shows a strong desire among policymakers to deepen our understanding of the opportunities and risks arising from digital asset innovation. Through this partnership, we hope to promote the development of common standards and regulatory frameworks that can better support cross border interoperability, as well as sustainable growth of the digital asset ecosystem.” 

The project tested the cross-border trading and settlement of wholesale central bank digital currencies (wCBDCs) between financial institutions, using new decentralised finance (DeFi) technology concepts on a public blockchain.

The project’s proof of concept successfully tested the cross-border trading and settlement of hypothetical euro, Singapore dollar and Swiss franc wCBDCs between simulated financial institutions. The process relied on three elements: 

• A common technical token standard provided by a public blockchain to facilitate exchange and interoperability between the different currencies.
• Bridges for the seamless transfer of wCBDCs between different networks.
• An Automated Market Maker (AMM), which is a specific type of decentralized exchange to trade and settle spot FX transactions automatically. 

The project, named Project Mariana, will look at the use of automated market makers for the cross-border exchange of hypothetical Swiss franc, euro and Singapore dollar wholesale CBDCs between financial institutions to settle foreign exchange trades in financial markets. 

Project Mariana, has three main objectives: 

(i) explore the design and application of automated market makers for wholesale CBDCs; 

(ii) investigate if a supra-regional network could work as an efficient and trusted hub for cross-border settlement; and 

(iii) research wholesale CBDC governance models within that network.

A proof of concept is expected to be delivered by mid-2023.

FINMA said that technical measures are needed to prevent the threshold of CHF 1000 from being exceeded for linked transactions within 30 days (and not just per day). However, this duty only applies to exchange transactions of virtual currencies for cash or other anonymous means of payment.

FINMA also recognised the regulations issued by the SRO-SIA, which have been adjusted to reflect the revised regulatory principles, as a minimum standard.