The Bank of England and the central banks of Singapore and Thailand tested a mechanism for coordinating cross-border foreign exchange operations between conventional payment systems and blockchain-based systems. The Project Meridian FX APAC experiment was intended to demonstrate how to conduct such operations without requiring all participants to use the same technological infrastructure.
PvP settlements
As CoinDesk reports, the project tested a payment-versus-payment, or PvP, mechanism. It provides that a transfer of one currency takes place only if the corresponding payment in another currency is made.
Participants also tested multilateral netting, an approach under which banks can offset payment obligations rather than settle each transaction separately. This reduces liquidity needs and settlement risks.
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Bank of England’s next steps
Tom Mutton, the Bank of England’s executive director for payments, innovation and fintech, said the project provided practical evidence of how synchronized settlements can reduce risks and improve the efficiency of cross-border foreign exchange operations.
The Bank of England plans to introduce an operational synchronization interface in 2028. However, legal mechanisms, regulatory oversight and broader participant involvement still need to be addressed for the technology’s commercial use. The test took place amid the spread of stablecoins as an alternative for international payments, promising faster transfers and round-the-clock availability.
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