The guidance provides information on aspects of financial market law that arise in relation to stablecoin projects and the impact of such projects on the supervised institutions.

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. 

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.

The recently completed Project Jura explored settling foreign exchange transactions in euro and Swiss franc wholesale CBDCs as well as issuing, transferring and redeeming a tokenised euro-denominated French commercial paper between French and Swiss financial institutions.

The central banks were the Bank of Canada, the Bank of England, the Bank of Japan, the ECB, the Federal Reserve, the Swiss National Bank and the Riksbank.

The report stresses three key principles, stating that a CBDC should:

• co-exist with, and complement, cash and other types of money in a flexible and innovative payment system;
• should support wider policy objectives and not compromise monetary or financial stability; and
• promote innovation and efficiency.

"A CBDC robustly meeting these criteria and delivering the features set out by this group could be an important instrument for central banks to deliver their public policy objectives," the report said.

The report said that "the world is changing" and that, even before COVID-19 hit, cash was in decline in some "advanced economies".

In order to "evolve and pursue their public policy objectives in a digital world", central banks need to research the benefits and disadvantages of the public having access to a CBDC.

The report said that all the participating central banks were committed to providing cash to the public as long as there is a demand for it, but that a CBDC could complement central bank money, "supporting a more resilient and diverse domestic payment system" as well as offer other opportunities that cash cannot meet and support innovation. However, none of the central banks that participated in the report has yet decided whether or not to issue a CBDC – a move that would be a "sovereign decision" to be made by each country.

The group of central banks said they will continue to collaborate on CBDCs and continue a dialogue in this space with domestic stakeholders.

Sir Jon Cunliffe, working group co-chair, Deputy Governor of the Bank of England and Chair of the Committee on Payments and Market Infrastructures, said:

"This report is a real step forward for this group of central banks in agreeing the common principles and identifying the key features we believe would be needed for a workable CBDC system. As well as helping central banks to meet their public policy objectives, the report provides a useful framework for how central banks provide money and support payment systems in an ever-evolving digital world. This group of central banks has built a strong international consensus which will help light the way as we each explore the case and design for CBDCs in our own jurisdictions."

The new Financial Services Act (FinSA) and Financial Institutions Act (FinIA) obliges FINMA to pass a number of implementing provisions, which are mainly technical in nature.

This includes a proposal to amend the client identification threshold values in its Anti-Money Laundering Ordinance (AMLO-FINMA) from CHF 5,000 to CHF 1,000 for exchange transactions in cryptocurrencies. Through these measures, FINMA is implementing the international standards approved in mid-2019 and acknowledging the heightened money-laundering risks in this area.