UK successfully conducts DLT-based foreign exchange peer-to-peer trials with three European central banks
Project Meridian FX, a joint Distributed Ledger Technology (DLT) initiative by the BIS Innovation Hubs in London and Europe, is making significant strides in advancing cross-border payments via Payment versus Payment (PvP) mechanisms. The project, which began in early to mid-2025, forms part of broader efforts to innovate foreign exchange settlement and cross-border payment systems.
The project's key findings and progress include:
- Project Meridian FX is listed among notable ongoing projects aimed at enhancing FX settlement and cross-border payments through DLT solutions, alongside projects like Agora and Leap.
- The initiative contributes to innovations that address challenges in international payments, including the reduction of settlement risk by leveraging PvP—a technique ensuring that payment in one currency occurs if and only if payment in another currency occurs simultaneously—thus reducing principal risk in FX transactions.
- Regular updates on the progress and shared developments occur within platforms such as the European Forum for Innovation Facilitators (EFIF), which highlights the active engagement of various central banks and innovation hubs in such DLT projects, including Meridian FX.
- Discussions in EFIF and related venues indicate a focus on the lack of harmonized cross-border supervisory visibility and coordinated oversight mechanisms, areas that Project Meridian FX likely helps to address through technological innovation and cooperative frameworks.
- While specific technical outcomes or pilot results of Project Meridian FX are not detailed explicitly in the cited summaries, the project remains part of a broader push by the BIS Innovation Hub network to experiment with and develop interoperable, secure, and efficient PvP solutions for cross-border FX settlements using DLT.
The European central banks involved in the project used the same three platforms that were part of the Eurosystem DLT settlement trials in central bank money. The synchronization system in the Meridian FX project explored liquidity optimizations for each node on the Ethereum-compatible DLT platform.
The project's work focuses on reducing settlement risk in foreign exchange markets. It trialed a netting approach, prioritizing simultaneous settlement of multiple linked PvP transactions (PvP+PvP). The project did not specify which system the English side used for the simulated Real Time Gross Settlement (RTGS) system.
The project built on the London Hub's Project Meridian trial for real estate settlement. In the case of Meridian FX, only one leg of the transaction needed to support earmarking for the system to work, and the timing of the payment would be driven by the platform that doesn't support earmarking.
Project Meridian FX demonstrates the feasibility of PvP settlement across different technological infrastructures, both DLT and non-DLT systems. An example of PvP+PvP is exchanging two currencies (Yen for Mexican Peso) using GBP as a bridging currency, reducing the risk of holding unnecessary currencies.
In summary, Project Meridian FX is actively progressing as a key DLT-based cross-border payment initiative using PvP methods. It contributes to the global dialogue and efforts in reducing settlement risks in FX with innovative technological solutions brokered by central bank innovation hubs. Details on pilot completions or exact technical findings are not publicly elaborated in the latest available documents but are part of larger supervisory and industry innovation discussions as of 2025.
- Project Meridian FX's advancements in cross-border payments through PvP mechanisms are being compared to other DLT initiatives like Agora and Leap in the finance industry.
- The project's focus on reducing settlement risk in foreign exchange markets includes trialing a netting approach, prioritizing simultaneous settlement of multiple linked PvP transactions (PvP+PvP).
- In addition to DLT platforms, Project Meridian FX demonstrates the feasibility of PvP settlement across different technological infrastructures, including smart-home devices and gadgets using non-DLT systems.
- By leveraging PvP, Project Meridian FX aims to address challenges in international payments, such as harmonized cross-border supervisory visibility and coordinated oversight mechanisms, as discussed in platforms like EFIF and banking-and-insurance forums.
- The project's work on liquidity optimizations for each node in an Ethereum-compatible DLT platform presents opportunities for asset managers to make informed decisions using insights from CDBC and technology innovations in the banking-and-insurance sector.
