The Bank of England's Project Meridian FX APAC has demonstrated that synchronisation can support safer and more efficient foreign exchange (FX) settlement across different central bank money systems. The project explored whether a common synchronisation model could operate across systems with varying architectures and capabilities, and how these differences affected implementation complexity and the functions of the Synchronisation Operator (SO).
The experiment successfully achieved atomic payment-versus-payment (PvP) settlement across three central bank wholesale settlement test environments with different architectures. It also demonstrated multilateral net FX PvP, which could improve liquidity efficiency while preserving atomic settlement outcomes. The capabilities of each system influenced the implementation complexity and the functions performed by the SO.
Exception scenarios tested provided encouraging evidence that synchronisation could preserve the integrity of linked settlement when errors or outages occurred. However, important real-world conditions remain for further testing. The appropriate policy treatment would depend on the functions performed by the SO and their materiality, with internationally developed principles potentially providing a more consistent basis for assessment across jurisdictions.
The project connected a SO prototype to three simulated wholesale settlement environments, testing bilateral PvP settlement, multilateral net FX PvP, and selected exception scenarios. Partior acted as the technical partner, supporting the development and integration of the SO prototype. A policy workstream examined the practical considerations for synchronised FX settlement, involving the Bank of England, Monetary Authority of Singapore, and Bank of Thailand, with contributions from observer central banks.