The BIS has announced Project Meridian FX, a joint initiative for foreign exchange (FX) transactions with the Bank of England, the Eurosystem and the London BIS Innovation Hub. The payment versus payment (PvP) transactions will synchronize between DLT-based systems and real time gross settlement systems (RTGS).
Last year the Bank of England and the London BIS Innovation Hub shared the results of the first stage of Project Meridian, a delivery versus payment trial. It used a “synchronization operator” to simultaneously settle a DLT-based real estate transaction and the money movement on the real time gross settlement system (RTGS).
At the time it also mentioned the potential to explore PvP as route to address foreign exchange settlement risks, which amounted to $2.2 trillion daily in April 2022. A previous BIS paper highlighted that the UK has the largest exposure.
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