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 paper focuses more in‐depth on certain areas, including DeFi on trading protocols and governance‐related matters. This paper also seeks to raise certain points of discussion that could be useful for consideration in a regulatory context.

Stakeholders are invited to comment on the paper, the deadline is 30 September 2023.

Beau said the first generation of cryptoasset regulations "does not fully address the challenges posed by DeFi." For example, in Europe, "fully decentralised services are excluded from the scope of the MiCA regulation". He argued it is necessary to build a regulatory framework adapted to the specificities of DeFi and "we have to recognise the technical specificities of decentralised finance and pay a particular attention to the three layers (blockchains, applications and access gates) that schematically constitute DeFi."