coindesk.com
The Bank of England and its counterparts in Singapore and Thailand have demonstrated a way to make cross-border foreign exchange (FX) transactions safer and more efficient, aiming to address longstanding weaknesses in traditional financial infrastructure as stablecoins emerge as alternative payment rails.
Project Meridian FX APAC demonstrated how transactions can be coordinated across conventional settlement systems and those built using blockchain technology, without requiring institutions to adopt identical infrastructure, the Bank of England said on Friday.
The project tested payment-versus-payment (PvP) settlement, ensuring that one currency changes only when the corresponding payment in another currency also takes place.
The experiment also tested multilateral netting, allowing banks to offset payment obligations rather than settling every transaction individually, reducing their liquidity requirements.
The works comes as stablecoins increasingly offer an alternative to conventional cross-border payments, promising faster transfers and around-the-clock availability.
"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 of payments, innovation and fintech.
The Bank of England plans to introduce a live synchronisation interface in 2028, although further work is needed on legal arrangements, regulatory oversight and broader participation before the technology can be deployed commercially.
