The Bank of England, the Monetary Authority of Singapore (MAS), and the Bank of Thailand have announced a collaboration to explore the technical and policy implications of settling foreign exchange (FX) transactions using synchronised settlement mechanisms.

Building on insights from Project Meridian FX, the collaboration will test synchronised FX settlement across a range of technical and institutional environments.

Initial experiments will use simulated versions of participating central banks’ Real Time Gross Settlement systems and Distributed Ledger Technology-based settlement environments to examine interoperability between the central banks’ systems and complex, multilateral scenarios involving different settlement infrastructures.

The experiments aim to enable atomic, real-time FX transactions that are secure and interoperable across diverse systems.

The collaboration will explore synchronisation’s potential to support Payment versus Payment (PvP) FX settlement across jurisdictions with varying infrastructures, time zones, and regulatory frameworks.

Tom Mutton, Director of Fintech at the Bank of England, said,

“This project explores, in more realistic conditions, how synchronisation solutions might support an open and effective global financial system by providing a new, innovative FX settlement channel. This, together with our RT2 Synchronisation Lab, forms part of our wider roadmap to support innovation and new functionality in money and payments.”

Kenneth Gay, Chief Fintech Officer at the Monetary Authority of Singapore, said,

“To realise the potential of tokenised financial systems, international cooperation is needed to foster the development of open and interoperable networks. We look forward to exploring how synchronised settlement can enhance interoperability across different jurisdictions and infrastructures through this collaboration.”

Thammarak Moenjak, Senior Director, Digital Currency Policy and Development Unit at the Bank of Thailand said,

“This joint initiative, linking different settlement infrastructures through an interoperable and synchronized mechanism, will potentially enhance the efficiency of conducting FX Payment versus Payment (FX PvP) transactions and support cross-border Delivery versus Payment (DvP) use cases.”

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