In a speech earlier this week, Sir Jon Cunliffe, Deputy Governor of the Bank of England, spoke about different ways central bank money could be used for DLT settlement. One of the paths is to synchronize a change in asset ownership on a DLT network with a simultaneous payment on the central bank’s payment network, the real time gross settlement (RTGS) system. Today the results were announced for Project Meridian involving a similar delivery versus payment (DvP) trial with the Bank of England at the London BIS Innovation Hub.
The application tested was the settlement of a house purchase with the HM Land Registry. However, the Meridian paper acknowledges other potential use cases, including corporate actions, securities settlement and cross-border payments.
DvP – called atomic settlement in the blockchain world – eliminates the risk that one party hands over the money or the asset, and the other party fails to deliver.
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