Regulation

BIS Used Ethereum Testnet And Curve Finance’s Code In CBDC Pilot

BIS Used Ethereum Testnet And Curve Finance’s Code In CBDC Pilot

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A developer has revealed that the Bank of International Settlements (BIS) reportedly used the Ethereum Sepolia testnet and Curve Finance’s smart contracts as the base for Project Mariana, its CBDC pilot.

This comes after BIS chief Agustin Carstens stated that countries must set up legal frameworks for CBDCs. 

Project Mariana Used Ethereum Testnet And Curve Finance Code

Project Mariana’s goal was to explore the application of Central Bank Digital Currencies (CBDCs) to enhance the efficiency and security of cross-border payments. The Bank of France confirmed the project’s successful conclusion. 

“The Bank for International Settlements (BIS) and the central banks of France, Singapore, and Switzerland have successfully concluded Project Mariana. The project tested the cross-border trading and settlement of wholesale central bank digital currencies (wCBDCs) between financial institutions, using new decentralized finance (DeFi) technology concepts on a public blockchain.”

With the project ending, a developer has revealed that the Bank of International Settlements used Ethereum’s Sepolia testnet and Curve Finance’s smart contracts as the project’s base. Both were used to test the efficacy of the cross-border forex automated market maker pilot. 

“Bank of International Settlements uses public @ethereum Sepolia testnet blockchain and @CurveFinance smart contracts for their cross-border FX AMM pilot. Although BIS goes to great lengths to avoid mentioning Curve by name, based on function signatures, BIS is using the @vyperlang source code for their pilot.”

The successful conclusion came after the general manager for the Bank of International Settlements (BIS), Agustin Carstens, stated that countries must set up legal frameworks to facilitate the deployment of CBDCs. A paper by the International Monetary Fund (IMF) stated that around 80% of banks are not allowed to issue a CBDC under current laws or don’t have clear legal frameworks on the matter. 

“This needs to be rectified. The public rightly demands forms of money that meet their needs and expectations. It is simply unacceptable that unclear or outdated legal frameworks could hinder their deployment. The work to address these issues needs to begin in earnest. And it needs to proceed at pace.”

BIS Wanted To Keep Use Private 

The CBDC project was largely dependent on Curve Finance’s code. Even so, the Bank of International Settlements wanted to keep the use of Curve’s framework under wraps. There has also not been any comment from core developers from Curve Finance or Ethereum regarding the use of decentralized finance (DeFi) code and architecture for Project Mariana. Going by Curve Finance’s expertise in facilitating stablecoin movement and swapping, their expertise could have been extremely valuable to the project. 

Curve Finance is a decentralized exchange that enables trading stablecoins and tokenized fiat currencies issued privately by entities such as Tether Holdings and Circle. Curve depends on an automated market maker model to draw liquidity, ensuring price discovery at considerably low slippage. Project Mariana, a collaboration between several central banks such as the Bank of France and the Swiss National Bank, used Curve’s architecture for the same goals as Curve: access to greater liquidity and price discovery. 

It is also not known which version of Vyper was used to code smart contracts in Project Mariana. Curve Finance had suffered a major exploit in July, losing around $60 million. An analysis of the attack led to the discovery of a vulnerability in the older versions of Vyper, which the hacker exploited through a re-entrancy attack. 

Anti-CBDC Bill Receives Republican Support 

On the one hand, the BIS has urged central banks to create a CBDC framework. On the other hand, an anti-CBDC bill, the CBDC Anti-Surveillance State Act, which pro-crypto Congressman Tom Emmer introduced, was recently taken into consideration by the House Financial Services Committee. However, the House of Representatives has yet to vote on the bill. 

If the bill is approved and adopted, it will bar the Federal Reserve from issuing a digital version of the dollar. The bill has found support among Republicans while being vehemently opposed by the Democrats. Supporters of the bill have argued that CBDCs give governments even more power and infringe on privacy rights. 

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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