Three central banks complete synchronized FX settlement trials

By Daniel Okafor

The Bank of England plans to launch a live foreign-exchange synchronization interface in 2028 after the Bank of England, Bank of Thailand and Monetary Authority of Singapore completed trials of a prototype linking traditional and tokenized FX settlement, according to the project’s findings.

The three central banks first announced their collaboration in November 2025 and, almost exactly one year later, reported that the trials had finished. Project Meridian FX APAC extends earlier work by the Bank for International Settlements under Project Meridian FX.

Partior, a fintech firm, built the prototype, called the Synchronisation Operator. It coordinated settlement across the three central banks’ systems so the separate legs of a trade could complete together.

What did the central banks test?

The project findings describe the model as payment-versus-payment, or PvP: “one currency moves only if the other currency moves too.” The trials showed that condition working across all three central banks’ systems, which used different technologies and currencies.

The tests also retained the essential properties of central bank money while connecting those systems. In practice, the project did not place every participant on one platform. It did not require unified infrastructure or a single shared ledger.

Instead, “each system keeps running its own way, and the operator coordinates the timing,” according to the project design. The design left each institution’s system in place while the Partior layer handled cross-system coordination.

Because the prototype operated across different technologies and currencies, successful PvP execution showed that the condition could work without technical uniformity. The project treated common timing, rather than a common platform, as the basis for linked settlement.

How does synchronization reduce settlement risk?

The main target was Herstatt risk: the danger that one side of a currency trade pays out while the other side fails before delivering its half. That risk remains central to foreign-exchange settlement because the two currency legs can settle on different systems and at different times.

The project also focused on liquidity efficiency. Banks often have to park cash to cover settlement timing gaps, and that cash cannot go to other uses while it waits. Synchronization sought to improve that timing without making every participant adopt one infrastructure.

The operator also handled multilateral netting across the test setups. Netting offsets what many parties owe one another, so fewer and smaller payments actually need to move.

The project findings cite daily FX transaction volumes above $1.4 trillion as of the 2025 BIS Triennial Survey. That number describes the broader market the work targets, not a disclosed transaction volume processed by the prototype. The findings describe functional success but do not quantify how much Herstatt risk fell or how much cash the model freed from settlement buffers.

The Reserve Bank of Australia and Bangko Sentral ng Pilipinas followed the work as observers and contributed insights during testing.

Why does this matter for tokenized money?

The Bank of England has framed the planned interface as a way to accommodate tokenized assets as they evolve, alongside different forms of wholesale money. Synchronization does not require a central bank digital currency, but it gives tokenized forms of central bank money a practical way to settle against traditional ones.

That distinction supports an interoperability model rather than a wholesale migration to one settlement system. Banks can keep their underlying infrastructure while the interface coordinates payments across conventional and tokenized forms of wholesale money.

Operationally, the trial connected separate settlement environments without combining their records. The coordination layer addressed timing while each central bank continued operating its own money and payment systems.

The next milestone is the Bank of England’s planned 2028 live interface, which will test whether the prototype’s coordination model can become operational market infrastructure while preserving the payment-versus-payment condition across traditional and tokenized forms of wholesale money.