CoinDesk
The Bank of England and its counterparts in Singapore and Thailand have demonstrated a way to settle cross-border foreign exchange transactions across conventional and blockchain-based systems without requiring institutions to adopt identical infrastructure, the central banks announced Friday.
Project Meridian FX APAC tested payment-versus-payment (PvP) settlement, ensuring a transfer in one currency executes only when the corresponding payment in the other currency also takes place. The experiment also ran multilateral netting, letting banks offset payment obligations instead of settling every transaction individually, which cuts both settlement risk and liquidity needs. The Bank of England plans a live synchronisation interface in 2028, though commercial deployment still requires work on legal arrangements, regulatory oversight and broader participation.
Why it matters
The timing is no accident. Stablecoins are increasingly offering an alternative to conventional cross-border payments, promising faster transfers and around-the-clock availability, and central banks are clearly responding. "Project Meridian FX APAC provides practical evidence of how synchronised settlement could help reduce risk and improve efficiency in cross-border FX transactions," said Tom Mutton, the Bank of England's executive director for payments, innovation and fintech.
The interoperability finding is the notable one: the experiment showed legacy settlement systems and blockchain rails can be coordinated directly, rather than forcing a wholesale migration. That positions blockchain infrastructure as a complement to existing rails, not a replacement, which is the framing institutional adopters have been waiting for.
Market impact
A 2028 go-live date for the Bank of England's synchronisation interface gives the project a concrete timeline, though Mutton's team is explicit that legal and regulatory work remains before commercial rollout.
Frequently asked questions
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What is Project Meridian FX APAC?
A joint experiment by the Bank of England and the central banks of Singapore and Thailand demonstrating how cross-border foreign exchange transactions can be coordinated across both conventional settlement systems and blockchain-based rails without identical infrastructure.
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What does payment-versus-payment (PvP) settlement mean?
PvP ensures a transfer in one currency executes only when the corresponding payment in the other currency also takes place, eliminating the settlement risk of one side paying without receiving.
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How does multilateral netting reduce liquidity needs?
It allows banks to offset payment obligations against each other rather than settling every transaction individually, which reduces both settlement risk and the liquidity banks must hold for cross-border FX.
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When will the Bank of England's synchronisation interface go live?
The Bank of England plans to introduce a live synchronisation interface in 2028, though commercial deployment still requires further work on legal arrangements, regulatory oversight and broader participation.
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Why are central banks testing blockchain settlement now?
Stablecoins increasingly offer an alternative to conventional cross-border payments with faster transfers and around-the-clock availability, and the central banks are demonstrating official-sector settlement infrastructure that can compete on the same corridors.
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