England successfully conducts digital ledger technology (DLT) trials for foreign exchange peer-to-peer transactions with three European central banks.

The BIS Innovation Hubs in London and Europe have successfully demonstrated the technical feasibility of payment-versus-payment (PvP) for cross-border foreign exchange settlement, marking a significant step forward in enhancing the speed, safety, and synchronisation of cross-border Foreign Exchange (FX) transactions[1][5]. The joint Distributed Ledger Technology (DLT) initiative, known as Project Meridian FX, was published in April 2025 in collaboration with the European Central Bank.

Key developments and findings include the technical validation of PvP mechanisms, enabling RTGS systems to be synchronised with multiple external DLT platforms, reducing settlement risk by ensuring simultaneous transfer of currency payments across different jurisdictions[1][5]. This synchronised settlement interface also enables interoperability not just between RTGS and DLT ledgers, but also with other asset registries, facilitating a broader ecosystem of tokenised assets[1].

The European central banks used the same three platforms for the project: Germany's Trigger Solution, France's DL3S, and Italy's TIPS Hashlink solution. The trial specifically demonstrated interoperability with a DLT-based system and a non-DLT based one[6]. It also showcased practical paths toward reducing settlement risk in foreign exchange markets across different technological infrastructures.

In Project Meridian FX, the aim was to simultaneously exchange pounds and euros. The synchronization system in the project explored liquidity optimizations for each node on the Ethereum-compatible DLT platform. The operator might prioritize payments of banks that only have transactions in one direction[2]. This feature might involve exchanging two currencies using a bridging currency, reducing the risk of holding unnecessary currencies. Banks that are sending and receiving may be able to use incoming payments to fund outgoing ones[3].

The project trialed a more typical netting approach and specifically demonstrated support for multiple linked PvP transactions, referred to as (PvP)+(PvP)[4]. PvP for foreign exchange (FX) means both sides of the transaction settle simultaneously or atomically, reducing Herstatt risk[5].

The work aligns with global efforts to make cross-border payments faster, cheaper, and safer through innovation. The central banks of England, France, Germany, and Italy were involved in the project. Building on these findings, the Bank of England and partners plan to launch a Synchronisation Lab in 2026 to test messaging flows and interoperability in a controlled environment, advancing towards real-world deployment[1].

The project forms part of a wider innovation roadmap to enhance wholesale payment infrastructure, support extended settlement hours, and contribute to the G20 agenda on improving cross-border payment efficiency[1]. It also complements other European initiatives such as the EU Blockchain Sandbox and innovation hubs focusing on tokenisation and digital asset settlement[4].

In summary, Project Meridian FX has significantly advanced the practical integration of PvP in cross-border payments using DLT, validating synchronisation techniques that promise to reduce settlement risk and improve efficiency in FX and wholesale payment systems across the UK and Europe[1][3][5].

[1] BIS Innovation Hubs. (2025). Project Meridian FX: Enabling interoperability for cross-border FX settlement using DLT. Retrieved from https://www.bis.org/publ/othp38.htm

[2] BIS Innovation Hubs. (2025). Project Meridian FX: Technical White Paper. Retrieved from https://www.bis.org/publ/othp38_technical.htm

[3] European Central Bank. (2025). Project Meridian FX: A joint initiative by the BIS Innovation Hubs in London and Europe. Retrieved from https://www.ecb.europa.eu/mopo/t2t/html/index.en.html

[4] European Commission. (2025). EU Blockchain Partnership. Retrieved from https://ec.europa.eu/info/business-economy-euro/banking-and-finance/digital-finance/blockchain_en

[5] Herstatt Risk. (2023). Definition and Examples. Retrieved from https://www.investopedia.com/terms/h/herstattrisk.asp

[6] DLT-based vs Non-DLT based Systems. (2024). Comparison and Uses. Retrieved from https://www.dltconsortium.org/resources/dlt-based-vs-non-dlt-based-systems-comparison-and-uses/

England successfully conducts digital ledger technology (DLT) trials for foreign exchange peer-to-peer transactions with three European central banks.