UK, Singapore, and Thailand central banks complete foreign exchange settlement trial linking traditional and tokenized systems

Three central banks have completed tests of a cross-border foreign exchange settlement system connecting traditional payment infrastructure with distributed ledger technology. 

In a joint statement on Friday, the Bank of England, Monetary Authority of Singapore, and Bank of Thailand said they conducted the experiments using a prototype developed by Partior, which coordinated payment-versus-payment (PvP) settlement and multilateral net FX transactions across their test environments.

The three central banks are working under Project Meridian FX APAC, announced last November. The project encompassed multiple currencies, technologies, settlement infrastructures, and time zones, with the Reserve Bank of Australia and Bangko Sentral ng Pilipinas also participating as observers, the banks said. 

The findings 

According to the statement, Partio's system matched settlement instructions, coordinated the reservation of funds, monitored payment readiness, and initiated settlement. 

The experiment also examined multilateral netting, which allows banks to offset payments against one another to reduce the liquidity needed for settlement.

However, the accompanying policy report identified questions around operational resilience, settlement finality, governance, liability, and cross-border data sharing. It also warned that additional functions, including holding funds or calculating net positions, could change an operator's regulatory responsibilities.

Tom Mutton, the BOE's executive director of payments, innovation and fintech, said the project provided "practical evidence of how synchronized settlement could help reduce risk and improve efficiency in cross-border FX transactions."

The BOE plans to launch a live synchronization interface in 2028. Findings from Project Meridian FX APAC will inform further work on synchronized settlement.