Central Banks Test Linked FX Settlement as Stablecoin Rivalry Grows

The Bank of England, the Monetary Authority of Singapore (MAS) and the Bank of Thailand have published the results of Project Meridian FX APAC, a trial of cross-border foreign exchange settlement that links traditional and blockchain-based systems. For traders, the news is a sign that central banks are working on their own tokenised settlement infrastructure while stablecoins pitch themselves as an alternative way to move money across borders.

Key takeaways

• The three central banks said synchronised settlement worked across test systems with very different designs, including conventional and distributed-ledger setups.
• Only the Bank of England has committed to a live service, which it plans to launch in 2028. MAS and the Bank of Thailand said taking part does not imply the same commitment.
• The policy report flagged open questions on resilience, settlement finality, governance, liability and data sharing.
• Crypto majors were lower on the day, and nothing in the data ties the move to this announcement.

What the central banks tested

According to the joint release, the project tested payment-versus-payment (PvP) FX settlement and multilateral net FX settlement across the three central banks' test environments. These spanned both Real-Time Gross Settlement and Distributed Ledger Technology-based systems. PvP means that one leg of a currency trade is only paid if the other leg is paid too, which cuts the risk of one side being left empty-handed.

The three test environments were the Bank of England's simulated RTGS setup, the Bank of Thailand's Project SAN tokenised payment prototype and MAS's SGD Testnet, a shared ledger for wholesale central bank digital currency. Fintech firm Partior was the technical partner. Reports said the Reserve Bank of Australia and Bangko Sentral ng Pilipinas observed the work.

A central idea is the synchronisation operator. It matches both sides of a trade and reserves funds in each system before triggering settlement. The institutions did not have to move onto one shared ledger.

Why stablecoins are part of the story

CoinDesk framed the trial against the rise of stablecoins, which promise faster transfers and round-the-clock availability compared with conventional cross-border payments. The central bank project takes a different route. As the Bank of Thailand's Pucktada Treeratpituk put it in the release, the aim is to improve cross-border FX while preserving trust in central bank money.

The test also raised some caveats. Ledger Insights reported that in two cases the operator had to do more than the light, non-custodial role central banks want it to play. That raised custody, credit and insolvency questions. The trial used test environments rather than live markets, so it is a proof of concept and not a launch.

Market reaction

Crypto prices were broadly weaker at 15:05 UTC on Saturday. Bitcoin traded at 65,939.00, down 4.11% on the day, within a range of 65,809.00 to 69,052.00. Ethereum was at 1,853.62, down 4.60%, with a day range of 1,846.38 to 1,954.20. Among other majors, Solana was down 7.61% and Hyperliquid down 8.28%.

A slow-moving institutional infrastructure project like this one is unlikely to explain a single-day move across the sector. Treat the price action and the central bank news as separate stories.

What to watch next

• How the Bank of England shapes its planned 2028 synchronisation service using the findings.
• Whether MAS or the Bank of Thailand announce implementation plans of their own.
• Progress on the legal and governance questions the policy report highlights.
• How tokenised settlement and stablecoin payment rails evolve side by side.

Crypto markets are highly volatile and this article is for education only, not investment advice.