Central banks trial real-time cross-border FX settlement system

A key focus is enabling atomic settlement for Payment versus Payment (PvP) FX trades. 

The Bank of England, Monetary Authority of Singapore, and Bank of Thailand announced a collaboration to test synchronised settlement mechanisms for foreign exchange (FX) trades.

The initiative will explore how real-time, interoperable FX settlement can be achieved across borders, building on earlier research under Project Meridian FX.

The experiment will use simulated versions of each central bank’s real-time gross settlement systems alongside distributed ledger technology-based environments. The goal is to test interoperability between infrastructures and support more complex, multilateral FX transactions.

These could span multiple time zones and regulatory jurisdictions, areas where current FX settlement still carries risk and inefficiency.

A key focus is enabling atomic settlement for Payment versus Payment (PvP) FX trades. This means ensuring both sides of a currency exchange are settled instantly and simultaneously, reducing counterparty and settlement risk.

Officials also signalled ambitions to develop cross-border financial infrastructure for tokenised transactions, improving efficiency and trust in next-generation payments and settlements.