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UK, Singapore, Thailand to test cross-border currency settlement
The Bank of England, the Monetary Authority of Singapore, and the Bank of Thailand have launched a joint initiative to test synchronized settlement of foreign exchange (FX) transactions across their systems.
The project will use simulated real-time gross settlement systems and distributed ledger technology environments to examine how different central bank infrastructures can work together.
The experiments aim to assess interoperability and support real-time, secure FX transactions between jurisdictions.
This collaboration builds on Project Meridian FX, which previously explored synchronized settlement in cross-border FX transactions.
The central banks said the effort could improve payment versus payment FX settlement, especially across regions with varying infrastructures, time zones, and regulatory frameworks.
The tests are expected to inform future development of wholesale settlement infrastructure in the participating countries.
🔗 Source: Monetary Authority of Singapore
🧠 Food for thought
Implications, context, and why it matters.
Project Meridian FX synced FX settlement across different ledgers in test environments
- Meridian FX linked a synthetic UK real-time gross settlement (RTGS) system to three Eurosystem (the euro area’s central banking system) interoperability solutions to run synchronized payment-versus-payment (PvP) FX transactions where both currency legs settle at the same time 1. The solutions were DL3S, TARGET Instant Payment Settlement (TIPS) Hash-Link, and Trigger Solution 1.
- A synchronisation operator (SO) coordinated settlement across RTGS and distributed ledger technology (DLT) platforms, which signaled technology neutrality 2.
- Tests used emulated systems rather than live platforms, which leaves open questions on operational readiness, regulatory approval timelines, and real transaction volumes for deployment 2.
- New trials with Singapore and Thailand expand into Asia-Pacific markets with different time zones and rules, which helps scope cross-regional implementation challenges.
Banks and payment vendors need to prepare for ISO 20022 interoperability as synchronized settlement advances
- Bank of England will expand ISO 20022 enhanced data in Clearing House Automated Payment System (CHAPS), with Purpose Codes for all payments from November 2027 3. Further Legal Entity Identifier (LEI) and structured remittance fields will follow with at least 18 months’ notice, which supports synchronized cross-border FX settlement 3.
- Financial institutions need systems that handle ISO 20022 messaging across different payment rails as Swift coexistence for MT103/MT202 Cross-Border Payments and Reporting Plus (CBPR+) payments ends in November 2025 4.
- Vendors can align roadmaps with UK CHAPS and related central bank timelines 3. Focus areas include DLT-RTGS interoperability, synchronization monitoring, and enhanced data validation 3.
- Testing and certification services for cross-border payment synchronization can fit the Bank of England’s at least 18 months of preparation time before new CHAPS enhanced data go live 3.
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