Central Banks of Three Countries Test Transactions Between Traditional and Digital Currencies

The Bank of England, the Monetary Authority of Singapore (MAS), and the Bank of Thailand have completed joint testing of international currency settlement synchronization technology. As part of the Meridian FX APAC project, regulators tested the possibility of conducting linked payments between traditional banking infrastructure and tokenized money platforms. The results showed that it is not necessary to transfer all operations to a single ledger for such systems to interact.

How central banks united different payment systems

The experiment involved three platforms with different architectures. The Bank of England used the Synchronisation Lab test environment, simulating a traditional real-time gross settlement system (RTGS). Thailand provided a centralized tokenized settlement platform, Project SAN, while Singapore offered the SGD Testnet infrastructure based on distributed ledger technology, supporting wholesale central bank digital currency (CBDC).

A special Synchronisation Operator (SO) was used to coordinate payments. Its prototype was developed and tested by the technology company Partior. The system matched participants' payment instructions, checked the availability of funds, and ensured their reservation. After confirming the readiness of all parties, the operator initiated the settlements.

Technical adapters were used to connect the platforms, taking into account the features of each system. This allowed for interaction between infrastructures using different methods of storing and transferring funds.

How technology reduces currency transfer risks

One of the main objectives of the project was to test the payment-versus-payment (PvP) mechanism, where both parties to a currency transaction must fulfill their obligations. This approach reduces the risk of a situation where one participant has already transferred money but has not received a counterpayment.

During the trials, the system successfully handled several non-standard scenarios, including participants' lack of funds, errors in payment details, and temporary infrastructure unavailability. If a problem arose before the final settlement launch, the operator canceled the reservation of funds. In case of temporary disconnection of one of the platforms after execution began, it repeated the necessary operations after restoring its functionality.

Regulators also tested multilateral netting of obligations. Instead of conducting each transfer separately, the system calculated the final amounts participants should transfer to each other. According to developers, this mechanism potentially allows banks to reduce the liquidity volume required for international settlements.

When banks can use the technology

Despite the successful results, Project Meridian FX APAC remains a research project. The trials were conducted in controlled conditions without real money transfers and full participation of commercial banks.

Developers also did not test the mechanism's operation when national payment systems' operating hours do not coincide. Legal finality of transfers, responsibility distribution, and regulation of the synchronization operator's activities require further study.

The Bank of England plans to launch a working payment synchronization interface in 2028. However, this is a separate initiative, and the timeline for practical implementation of Meridian FX APAC solutions has not yet been determined.

The experiment results demonstrate the technical possibility of interaction between traditional payment systems and tokenized money without integrating the entire infrastructure into a single network. However, transitioning to real international settlements will require additional testing and agreement on legal mechanisms between countries.