Project Meridian FX: exploring synchronised settlement in FX

Project Meridian FX is an experiment led by the BIS Innovation Hub's London and Eurosystem Centres together with the Bank of England, Bank of France, Deutsche Bundesbank, Bank of Italy and European Central Bank. It builds on the original Project Meridian by focusing on foreign exchange (FX) transactions. The project demonstrates how operators of wholesale payment infrastructures can enable interoperability with new technologies, such as distributed ledger technology (DLT), with a focus on FX transactions.

At the heart of Project Meridian FX is the synchronisation operator - a technology-neutral interface designed to coordinate the simultaneous exchange of assets across payment systems. Through the experiments conducted, synchronisation operators enabled atomically settled FX transactions between different wholesale payment infrastructures across jurisdictions, and between an RTGS system and a DLT platform.

Using an emulated UK RTGS system, the project connected to three experimental interoperability solutions from the Eurosystem: DL3S (developed by the Bank of France), TIPS Hash-Link (developed by the Bank of Italy) and the Trigger Solution (developed by the Deutsche Bundesbank). In each case, the synchronisation operator successfully orchestrated payment-versus-payment (PvP) FX settlements.

Meridian FX also explored additional functionalities, including liquidity-saving mechanisms and user-defined transaction rules, such as approval limits. The findings show that synchronisation can be agnostic to both the asset or fund of the transaction involved and the technology of the ledgers, highlighting its potential use in other markets.