BIS-Led Project Meridian FX validates technology-neutral synchronised settlement - Trade Treasury Payments

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BIS-Led Project Meridian FX validates technology-neutral synchronised settlement

Project Meridian FX, a collaborative initiative led by the Bank for International Settlements (BIS) Innovation Hub alongside several European central banks, has demonstrated the potential for greater interoperability between wholesale payment infrastructures in foreign exchange (FX) transactions.

The project connected a synthetic model of the UK’s real-time gross settlement (RTGS) system with three experimental interoperability solutions from the Eurosystem: DL3S (Bank of France), TIPS Hash-Link (Bank of Italy), and the Trigger Solution (Deutsche Bundesbank). 

Through the use of distributed ledger technology (DLT) and a synchronisation operator, the project successfully orchestrated payment-versus-payment (PvP) settlement of FX transactions across jurisdictions.

By enabling synchronised settlement (where the transfer of one currency occurs only if the corresponding transfer in another currency is completed) Meridian FX addresses key action areas outlined in the G20 cross-border payments roadmap, particularly the reduction of FX settlement risk.

The findings confirm that synchronisation can operate independently of both the type of asset and the underlying ledger technology. 

Project Meridian FX builds on earlier research by the BIS and Bank of England and further explores how existing and experimental infrastructures can coordinate settlement activities without requiring wholesale system overhauls. The insights gained are expected to inform the future work of participating central banks as they continue efforts to modernise and strengthen the global cross-border payments ecosystem.

The full findings are available in the report Project Meridian FX: Exploring Synchronised Settlement in FX, published by the BIS Innovation Hub.