Tokenization: The Bank of England, Singapore, and Thailand Connect Blockchain and Traditional Exchange

Kipling contradicts Threadneedle Street. "East is East, and West is West, and never the twain shall meet," wrote the poet. The Bank of England, the Monetary Authority of Singapore (MAS), and the Bank of Thailand published the results of a trial on Friday that brings together much more than two worlds: traditional payment systems and blockchain-type ledgers across three jurisdictions.

The trial is called Meridian FX APAC. It tested the settlement of foreign exchange operations in central bank currency between tokenized and traditional infrastructures. London is preparing the same junction for its government bonds on blockchain.

Key points of this article:

• Three central banks have validated synchronized currency settlement between RTGS systems and distributed ledgers.
• Partior designed the prototype, a network founded by JPMorgan, DBS, Standard Chartered, and Temasek.
• The Bank of England aims to have a production synchronization service by 2028.

Meridian FX APAC Against the Old Herstatt Risk

June 1974, Cologne. The German regulator closes Herstatt Bank at the end of the German day. Its counterparties had already paid it Deutsche Marks, but the dollars owed in return to New York never left.

Since then, its name has designated the settlement risk in foreign exchange. One leg of the transaction goes, the other never does.

Yet, the problem has not disappeared. According to the 2025 triennial survey by the Bank for International Settlements, cited by the MAS, over $1.4 trillion in daily foreign exchange settlements remained fully exposed to this risk in April 2025. That’s 10% of the total.

The solution is called PvP, for "payment versus payment." Both currencies move together, or nothing moves.

Meridian FX APAC applies this principle between systems that do not speak the same language. There are the RTGS, those real-time gross settlement systems that handle large transfers between banks. And there are distributed ledgers (DLT), the technological family of which blockchain is a part.

Partior as the Conductor of Synchronization

The prototype comes from Partior, a DLT settlement network founded by JPMorgan, DBS, Standard Chartered, and Temasek. It acts as the "synchronization operator": it matches instructions, verifies that funds are reserved on both sides, and then triggers the settlement.

If one leg falters, everything is then canceled. The three central banks simulated insufficient funds, invalid account identifiers, and temporary outages. In each case, the operator completed the settlement or completely undid the operation, according to the summary published by the Bank of England.

The second test finally focused on multilateral netting. Banks settle their payments among themselves and only settle the net amount, which reduces the liquidity to be immobilized. Technically feasible, conclude the three institutions, which do not quantify the savings.

However, the hardest part was keeping the same batch of transactions aligned while liquidity remained blocked. Calculating net positions posed much less trouble.

In Singapore, the testing environment did not allow reserving funds for a third party. The operator therefore maintained a dedicated escrow account, a workaround that the Bank of England deems suitable for this testbed.

Tokenization and Central Bank Currency Under Conditions

The political report published alongside cools the enthusiasm. A technically atomic transaction does not, by itself, create a legally recognized settlement in multiple countries at once. The finality of settlement, governance, operator oversight, and data sharing between authorities remain open.

Another warning: if the operator begins to hold funds or calculate net positions, its regulatory responsibilities change in nature.

The simulations also left aside heavy topics, such as non-overlapping time zones, prolonged outages, or real market participants. The Reserve Bank of Australia and the central bank of the Philippines followed the political aspect as observers.

For the crypto market, London's message remains consistent. The Bank of England prefers to see banks innovate with tokenized deposits rather than private stablecoins, and major British banks conducted their first interbank transfers of this type in September, according to Euronews.

The Bank of England aims to launch its synchronization service in production by 2028. However, this timeline does not bind either the MAS or the Bank of Thailand, even though Singapore is already testing the tokenization of financial assets with Swift, UBS, and Chainlink in its Guardian project.

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