Project Meridian FX APAC Demonstrates Cross-Border Payment Coordination

The technical experimentation was carried out using a prototype Synchronisation Operator (SO), developed by Partior, which was integrated with the three simulated settlement environments. The SO facilitated coordination between the systems by exchanging information and ensuring that settlement only proceeded once agreed conditions were met. The experiment did not involve live participants or production operating conditions, but instead focused on two core use cases: atomic FX PvP settlement and multilateral net FX PvP settlement. These use cases were tested across a range of scenarios, including bilateral and multilateral transactions, as well as exception scenarios such as insufficient funds, invalid account identifiers, and temporary infrastructure outages. [1]

The project’s findings indicated that synchronisation could support atomic PvP settlement across systems with materially different technologies and operating models. This suggests that cross-border interoperability does not necessarily require central banks to converge on a single infrastructure design. However, system capabilities such as authorised third-party access and funds reservation significantly influenced the complexity of implementation and the functions performed by the SO. In some cases, system-specific adaptations were required, such as the use of an escrow account in the Monetary Authority of Singapore’s test environment to replicate funds reservation. [1]

The policy analysis conducted as part of the project examined five key areas: access and assurance, regulatory perimeter and oversight, settlement finality, governance and accountability, and data and information sharing. It found that the functions and responsibilities performed by the SO were shaped by system design and capabilities, which in turn affected the operator’s risk profile and the relevant policy considerations. The analysis also highlighted the distinction between technical atomicity and legal settlement finality, noting that coordinating payment legs to settle atomically does not automatically establish a legally recognised settlement outcome across separate domestic systems and jurisdictions. [1]

The findings of Meridian FX APAC suggest that further technical and policy work is needed before conclusions can be drawn about the suitability of particular implementation models or policy approaches. The Bank of England plans to use the findings to inform the development of a live synchronisation service, in line with its commitment to launch synchronisation in 2028. However, participation in the project does not imply an equivalent implementation commitment or a particular policy direction by the Monetary Authority of Singapore or the Bank of Thailand. Further technical work could include testing synchronisation across additional use cases, such as delivery-versus-payment, and expanding experimentation to additional jurisdictions to assess the robustness of the findings across a broader range of settlement systems and operating models. [1]

Project Meridian FX APAC investigated how synchronisation could support safer and more efficient foreign exchange settlement across different central bank money systems. The project tested whether a common synchronisation model could function across systems with varying architectures and capabilities, focusing on the implementation complexity and functions performed by the Synchronisation Operator (SO). Key findings indicate that synchronisation successfully enabled atomic payment-versus-payment (PvP) settlement across three central bank wholesale settlement test environments with significantly different architectures and capabilities (BOE Publications). [1]

The project demonstrated that multilateral net FX PvP could be achieved across three experimental environments, potentially improving liquidity efficiency while preserving atomic settlement outcomes. System capabilities, such as authorised third-party access and funds reservation, influenced the implementation complexity and the functions performed by the SO. In environments where these capabilities were not directly available, adaptations were necessary to enable PvP settlement, which added complexity and could expand the operator’s responsibilities if implemented in practice (BOE Publications). [1]

Selected exception scenarios provided encouraging evidence that synchronisation could preserve the integrity of linked settlement when errors or outages occurred. The Synchronisation Operator (SO) was able to complete settlement or fully unwind the transaction without leaving individual payment legs to proceed independently. However, important real-world constraints, such as non-overlapping operating hours and time-zone differences, were not fully tested in the experiment (BOE Publications). [1]

Sources

BOE Publications

Prepared with AI assistance from the cited sources.