The Bank of England, the Monetary Authority of Singapore (MAS), and the Bank of Thailand are exploring how synchronized settlement mechanisms could streamline cross-border FX transactions, making them faster, more secure, and fully interoperable.

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Experimenting With New FX Infrastructure

The initiative builds on insights from Project Meridian FX and will initially use simulated versions of the central banks’ Real Time Gross Settlement (RTGS) systems alongside Distributed Ledger Technology (DLT)-based environments. The ultimate goal is to enable atomic, real-time FX transactions—payments that are completed fully and simultaneously across systems, reducing risk and delay.

By testing synchronized settlement, the central banks aim to enhance Payment versus Payment (PvP) FX settlements and explore Delivery versus Payment (DvP) use cases in cross-border environments. These mechanisms could allow currencies to be exchanged safely and instantly, even across different time zones, infrastructures, and regulatory frameworks.

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International Collaboration for Tokenized Finance

The project also reflects a broader push to support tokenized financial systems and open, interoperable networks. If successful, this initiative could lay the groundwork for a new era of cross-border financial transactions. Real-time, synchronized FX settlements would reduce operational risk, speed up payments, and create a more efficient global financial ecosystem.

The collaboration signals a clear trend: central banks are actively exploring digital and tokenized solutions to modernize traditional payment systems, ensuring they remain effective in an increasingly global and technologically complex marketplace.

Expect ongoing updates as this story evolves.

Source: Finance Magnates