The Bank for International Settlements Uses Curve for CBDC Pools

The Bank for International Settlements Uses Curve for CBDC Pools

In a significant development for the convergence of traditional finance and decentralized finance, Project Mariana, a joint initiative involving the BIS Innovation Hub, Bank of France, Monetary Authority of Singapore, and Swiss National Bank, is exploring the application of Curve v2 HFMM for on-chain wholesale Central Bank Digital Currency (CBDC) pools. The project merges trading and settlement into one process using Automated Market Makers (AMMs), a move that aims to eradicate the typical credit and settlement risks associated with interbank foreign exchange (FX) trading.

Project Mariana also introduces a standard for fungible wholesale CBDC tokens as set by central banks. This move allows for interoperability, with different wCBDCs being usable within the same protocol. Notably, the initiative incorporates significant roles for both commercial banks—as the requesters of wCBDC issuance and redemption, and liquidity providers within an international network—and central banks, who manage wCBDC issuance and redemption and operate bridges for wCBDC transfers.

The ultimate goal of Project Mariana is not to completely decentralize central bank currencies but rather to harness the power of technology to mitigate settlement and foreign exchange risks. The use of Curve v2 HFMM plays a vital part in this strategy. The solution helps manage slippage, a substantial concern in large-scale FX transactions, and deters potential trading malpractices, such as front-running. More details on Project Mariana's findings and implications are anticipated in a final report due later this year.

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Mastercard to launch beta ‘blockchain app store’

Mastercard announced its most recent blockchain initiative on Wednesday, unveiling plans to release a trial version of its Multi-Token Network (MTN) this summer. The initial launch of the product, scheduled as a beta, is set for the United Kingdom. 

In a letter released on the same day, Raj Dhamodharan, Mastercard's lead for crypto and blockchain products, explained that MTN is designed to serve as an experimental platform for creating operational pilot applications and use cases in cooperation with financial institutions, fintech companies, and central banks. 

Mastercard's strategy involves extending MTN to further global markets, contingent on securing more partners. The underlying concept relies on persuading developers to construct on Mastercard's sanctioned blockchain, which the company has promoted as a tool with the potential to revolutionize its payment systems.

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Slovakia to cut taxes on crypto sales

On Wednesday, Slovakian legislators overwhelmingly passed a law, with a vote of 112-2, designed to lower taxes on digital currency sales. The purpose of this income tax legislation is "to diminish the tax pressure related to the selling of virtual currencies, hence making their utilization in daily life easier," as elucidated in a clarifying document released by a collective of the Slovak National Council's members.

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Coinbase slams SEC

Coinbase, a crypto exchange based in the U.S., has criticized the overstepping of bounds by the U.S. Securities and Exchange Commission (SEC). The company asserts that the cryptocurrencies featured on its platform fall beyond the control of the regulator. Furthermore, Coinbase insists that these assets are not investment agreements and hence, do not qualify as securities.

This stance was presented by Coinbase in their response submitted to the U.S. District Court for the Southern District of New York on June 28th.

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Six Clovers presents cross-border crypto payments on Sui

Six Clovers, a creator of cryptocurrency payment solutions, has launched the Versal Network on the Sui blockchain. This will offer businesses a service that can simplify international transactions, as stated in a press release. The network is now linked with Transak, a platform that enables the purchase of the Sui blockchain's SUI token using traditional currency. Additionally, Halliday HQ is now on Sui, which is a primary-level blockchain established by former employees of Meta Platforms (META) and has a valuation of $2 billion from a funding round in September.

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COMP token rises by 50% in 4 days

The indigenous cryptocurrency of the decentralized finance (DeFi) system, Compound (COMP), experienced a surge exceeding 50% within a four-day timeframe, triggered by an increase in trading volume and withdrawals on Binance. At the time of reporting, COMP displayed a trading value of $45.98, which is a two-fold increase from its lowest point on June 10 at $22.89 and a 51.4% increase since Sunday, as per data from TradingView.

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Other breaking news

• Maple launches lending desk
• Compound founder launches Bond Fund
• Aptos now has an NFT aggregator
• Central Banks exploring Curve
• Prime Trust locked out of $45 million wallet

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Wrapping up

As we wrap up today's newsletter, we see a convergence of traditional and decentralized finance with Project Mariana utilizing Curve v2 HFMM for CBDC pools and Mastercard's planned beta 'blockchain app store'. Meanwhile, Coinbase's dispute with the SEC underlines the ongoing regulatory challenges in the crypto space, even as Slovakia's legislative decision to cut taxes on crypto sales indicates wider acceptance of digital currencies. DeFi market volatility is exemplified by COMP's surge, and advancements in cross-border transactions come with Six Clover's launch on the Sui blockchain. See you tomorrow!