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Last updated: June 19, 2025, 17:18 | Written by: Katie Haun

The Bank of England (BoE) and the Bank for International Settlements (BIS) have successfully concluded a groundbreaking pilot project exploring the use of distributed ledger technology (DLT) for interbank settlements.This collaborative effort, known as Project Meridian, marks a significant step towards modernizing the infrastructure underpinning global financial transactions.The project, spearheaded by the BIS Innovation Hub London Centre, delved into the potential of DLT to synchronize asset ownership changes with real-time payments on a central bank's payment network, specifically the Bank of England's real-time gross settlement (RTGS) system.The implications of this successful pilot are far-reaching, promising to enhance efficiency, transparency, and security in interbank transactions.But what does this actually mean for the future of finance, and how might it impact everyday transactions?Keep reading to explore how this innovative technology could reshape the landscape of global payments.

Project Meridian: Exploring DLT for Real-Time Gross Settlement (RTGS)

Project Meridian represents a joint financial program designed to investigate how modern technology can improve interbank settlement processes. BIS, Bank of England conclude DLT settlements pilot The insights of Project Meridian would be used by the Bank of England in its real-time gross settlement system. The Bank of England and the Bank for International Settlements (BIS) Innovation Hub London Center have tested a distributed ledger technology-powered settlements system between theThe core idea revolves around leveraging DLT to create a more synchronized and efficient system for transferring funds between financial institutions.The traditional RTGS systems, while robust, can be complex and time-consuming. Distributed ledger technology (DLT) pilot project by BIS and Bank of England raises questions on settlement irrevocability and digital asset ownership.DLT offers the potential to streamline these processes by providing a shared, immutable ledger of transactions.

The successful completion of this pilot signifies that the BoE and BIS have demonstrated the feasibility of using DLT to facilitate inter-agency settlements. [ Ma ] Developers Implement Crucial Fix After Ethereum s Pectra Upgrade Faced Issues on Sepolia Testnet NFT [ Ma ] Bitcoin Soars Back To $88,000 After BlackRock CEO Says Buy The Dip BitcoinThe insights gained from Project Meridian will be invaluable as the Bank of England considers future upgrades and enhancements to its RTGS system.The focus is on exploring various ways that central bank money can be used to settle transactions on DLT networks. The Bank of England and the Bank for International Settlements (BIS) Innovation Hub London Center have tested a distributed ledger technology-powered settlements system between the institutions. The insights of the project will be used by the Bank of England in its real-time gross settlement (RTGS) system. On April 19, BIS published a report about the [ ]Sir Jon Cunliffe, Deputy Governor of the Bank of England, highlighted the potential of synchronizing asset ownership changes on a DLT network with simultaneous payments on the central bank's RTGS system.

Key Objectives of Project Meridian

Explore the feasibility of DLT for RTGS: To assess whether DLT can provide a viable alternative or enhancement to existing RTGS systems.
Improve interbank settlement efficiency: To streamline the process of transferring funds between financial institutions.
Enhance transparency and security: To leverage the inherent security and transparency of DLT to reduce risk and improve oversight.
Inform future RTGS system development: To provide insights that can be used to guide the development of future RTGS systems.

How Does DLT Enhance Interbank Settlements?

DLT, at its core, is a decentralized database shared across multiple participants. The Bank of England (BoE) and the Bank for International Settlements (BIS) have concluded their pilot into a distributed ledger technology-based system for interbank settlements. Both institutions have been exploring an innovative real-time gross settlement (RTGS) system using distributed ledger technology (DLT) to power the synchronizationThis shared ledger provides a single, immutable record of all transactions, making it extremely difficult to tamper with or alter. The Bank of England and the Bank for International Settlements (BIS) Innovation Hub London Center have tested a distributed ledger technology-powered settlements system between the institutions. The insights of the project will be used by the Bank of England in its real-time gross settlement (RTGS) system. On April 19, BISThis inherent transparency and security are particularly appealing for financial institutions seeking to improve the integrity of their settlement processes.

In the context of interbank settlements, DLT can facilitate the following benefits:

Reduced settlement times: By automating many of the manual processes involved in traditional settlements, DLT can significantly reduce settlement times.
Lower transaction costs: The elimination of intermediaries and the automation of processes can lead to lower transaction costs for financial institutions.
Improved transparency: The shared ledger provides all participants with a clear view of the transactions, enhancing transparency and reducing the risk of fraud.
Enhanced security: The cryptographic nature of DLT makes it extremely difficult for unauthorized parties to tamper with the ledger, enhancing security and reducing the risk of cyberattacks.
Increased efficiency: The streamlined processes and automation enabled by DLT can lead to significant efficiency gains for financial institutions.

The successful purchase of houses in Wales and England, as reported by BIS, exemplifies the potential of DLT to streamline real-world transactions by using a synchronization network. BIS, Bank of England conclude DLT settlements pilot The insights of Project Meridian would be used by the Bank of England in its real-time gross settlement system.This pilot demonstrates the tangible benefits of DLT in simplifying complex financial processes.

Implications for the Bank of England's RTGS System

The insights gleaned from Project Meridian will play a crucial role in shaping the future of the Bank of England's RTGS system. On April 19, BIS published a report about the joint pilot project with the Bank of England called Project Meridian. According to the 44-page document, the banks have successfully purchased houses in Wales and England through the synchronization network using distributed ledger technology (DLT).The BoE is actively exploring ways to incorporate DLT into its existing infrastructure, with the goal of creating a more efficient, secure, and transparent payment system.The potential integration could take several forms, ranging from a complete overhaul of the RTGS system to the implementation of specific DLT-based components.

Potential Integration Scenarios

Complete RTGS replacement: A scenario where the entire RTGS system is rebuilt using DLT, offering the greatest potential for efficiency gains and security enhancements. BIS, Bank of England conclude DLT settlements pilot. 20 . Latest news about Bitcoin and all cryptocurrencies. Your daily crypto news habit. Read More.However, this would also be the most complex and time-consuming option.
Hybrid approach: A scenario where specific components of the RTGS system are replaced with DLT-based solutions, allowing for a gradual transition and minimizing disruption.This approach offers a balance between innovation and stability.
Overlay system: A scenario where a DLT-based system is layered on top of the existing RTGS system, providing additional functionality and capabilities.This approach is the least disruptive but may not offer the full benefits of DLT.

Regardless of the chosen approach, the Bank of England's ultimate goal is to create a payment system that is fit for the future, capable of supporting the evolving needs of the financial industry and the broader economy.The integration of DLT is seen as a key enabler of this vision.

Challenges and Considerations

While the potential benefits of DLT for interbank settlements are significant, there are also several challenges and considerations that need to be addressed before widespread adoption can occur.

Scalability: DLT networks need to be able to handle a large volume of transactions without compromising performance. The Bank of England and the Bank for International Settlements (BIS) Innovation Hub London Center have tested a distributed ledger BIS, Bank of England conclude DLT settlements pilotThis is a critical requirement for RTGS systems, which process a significant number of transactions every day.
Interoperability: DLT networks need to be able to interact with each other and with existing payment systems.This is essential for ensuring seamless integration and preventing fragmentation of the financial system.
Regulatory clarity: Clear and consistent regulatory frameworks are needed to provide certainty and encourage innovation in the DLT space. The Bank of England and the Bank for International Settlements (BIS) Innovation Hub London Center have tested a distributed ledger technology-powered settlements system between the institutions. The insights of the project will be used by the Bank of England in its real-time gross settlement (RTGS) system.This includes addressing issues such as data privacy, consumer protection, and anti-money laundering.
Cybersecurity: While DLT offers inherent security benefits, it is also susceptible to cyberattacks.Robust security measures are needed to protect DLT networks from threats and ensure the integrity of the data they contain.
Settlement Irrevocability and Digital Asset Ownership: The pilot project also raises crucial questions about settlement irrevocability and the legal framework surrounding digital asset ownership, issues that need careful consideration as DLT adoption progresses.

Addressing these challenges will require collaboration between regulators, financial institutions, and technology providers. The insights of the project will be used by the Bank of England in its real-time gross settlement (RTGS) system. On April 19, BIS published a report about the joint pilot project with the Bank of England called Project Meridian. According to the 44-page document, the banks have successfully purchased houses in Wales and England through theThe Bank of England and the BIS are actively working to address these issues and create a framework that supports the responsible innovation of DLT in the financial system.

The Future of Interbank Settlements: A DLT-Powered Transformation?

The successful completion of Project Meridian marks a significant milestone in the journey towards a DLT-powered future for interbank settlements.While widespread adoption is still some way off, the potential benefits are undeniable. BIS, Bank of England conclude DLT settlements pilot The insights of Project Meridian would be used by the Bank of England in its real-time gross settlement system. bank projectDLT offers the promise of a more efficient, secure, and transparent payment system, one that is better equipped to meet the evolving needs of the global economy.

As central banks and financial institutions continue to explore the potential of DLT, we can expect to see further pilot projects and experiments aimed at refining the technology and addressing the challenges associated with its adoption.The ultimate goal is to create a payment system that is not only technologically advanced but also resilient, secure, and accessible to all.

What's Next for DLT and Interbank Settlements?

Continued pilot projects and experimentation: Further exploration of DLT in different use cases and environments.
Development of industry standards and best practices: Collaboration on standards to ensure interoperability and security.
Engagement with regulators: Working with regulators to create a clear and consistent regulatory framework.
Investment in research and development: Continued investment in DLT technology to improve its scalability, security, and performance.

Real-World Examples and Use Cases

Beyond the theoretical benefits, consider these potential real-world applications of DLT in interbank settlements:

* **Cross-border payments:** DLT can dramatically reduce the time and cost associated with international money transfers. The insights of Project Meridian would be used by the Bank of England in its real-time gross settlement system. The Market Cap: $2,795,886,881,016.84; 24h Vol: $Imagine sending money to a family member overseas and having it arrive within minutes instead of days, with significantly lower fees. * **Supply chain finance:** DLT can provide greater transparency and efficiency in supply chain financing, allowing businesses to track goods and payments in real-time.This could help small and medium-sized enterprises (SMEs) access financing more easily and improve their cash flow. * **Securities settlement:** DLT can streamline the process of settling securities transactions, reducing the risk of errors and delays.This could lead to lower costs and greater efficiency for investors and financial institutions. * **Central Bank Digital Currencies (CBDCs):** The exploration of DLT is closely linked to the potential development of CBDCs, digital forms of central bank money. Trusted News Discovery Since 2025. Global Edition. SaturdayDLT could provide the infrastructure for issuing, distributing, and managing CBDCs, revolutionizing the way we think about money.Some projects also are exploring the offline functionality of CBDC's for stability and accessibility, such as in developing nations.

These examples demonstrate the transformative potential of DLT to reshape the financial landscape and create new opportunities for businesses and individuals.

The Impact on Consumers and Businesses

While the initial focus of DLT adoption in interbank settlements is on improving the efficiency and security of wholesale payments, the benefits will ultimately trickle down to consumers and businesses. Beta Tester. BIS, Bank of England conclude DLT settlements pilot. ; NewsFaster and cheaper payments can lead to lower prices for goods and services, improved cash flow for businesses, and greater access to financial services for individuals. The Bank of England (BoE) and the Bank of International Settlements (BIS) have completed a successful pilot of a payment system based on decentralized ledger technology (DLT) for interbank settlements. The two banks have been working on a system of payment called real-time gross settlement (RTGS) using DLT.The improved efficiency could also reduce overhead for businesses allowing those cost savings to be passed onto consumers.

Imagine a world where:

* **Businesses can receive payments from customers instantly,** improving their cash flow and reducing the need for expensive financing. * **Consumers can send money to friends and family overseas quickly and cheaply,** without having to pay high fees to traditional money transfer services. * **Small and medium-sized enterprises (SMEs) can access financing more easily,** thanks to the greater transparency and efficiency of DLT-based supply chain finance solutions. * **The overall cost of financial services is lower,** as a result of the efficiency gains enabled by DLT.

These are just some of the potential benefits that DLT can bring to consumers and businesses. The Bank for International Settlements (BIS) and the Bank of England have successfully piloted a DLT-based inter-agency settlement platform.As the technology matures and adoption increases, we can expect to see even more innovative applications emerge.

Common Questions About DLT and Interbank Settlements

Here are some frequently asked questions about DLT and interbank settlements:

* **What is DLT?** DLT stands for Distributed Ledger Technology.It is a decentralized database shared across multiple participants. * **What is RTGS?** RTGS stands for Real-Time Gross Settlement. The Bank of England and the Bank for International Settlements (BIS) Innovation Hub London Center have tested a distributed ledger technology-powered settlements system between the institutions.It is a system for transferring funds between financial institutions in real-time. * **What is Project Meridian?** Project Meridian is a joint pilot project between the Bank of England and the Bank for International Settlements (BIS) to explore the use of DLT for interbank settlements. * **What are the benefits of using DLT for interbank settlements?** The benefits include reduced settlement times, lower transaction costs, improved transparency, and enhanced security. * **What are the challenges of using DLT for interbank settlements?** The challenges include scalability, interoperability, regulatory clarity, and cybersecurity. * **Will DLT replace traditional payment systems?** It's unlikely DLT will completely replace traditional systems in the near future.A hybrid approach, combining DLT with existing infrastructure, is more probable. * **Is DLT secure?** DLT is generally considered to be secure, but it is also susceptible to cyberattacks. Related: BIS, Bank of England conclude DLT settlements pilot Offline functionality is a major feature of multiple CBDC projects currently being developed by global central banks.Robust security measures are needed to protect DLT networks from threats.

Conclusion: A Step Towards a More Efficient Financial Future

The successful conclusion of the BIS and Bank of England's DLT settlements pilot, Project Meridian, signifies a crucial step toward a more efficient, secure, and transparent financial future.The insights gained from this project will inform the Bank of England's ongoing efforts to modernize its RTGS system.While challenges remain, the potential benefits of DLT for interbank settlements are undeniable, promising to streamline processes, reduce costs, and enhance security. The Bank of England and the Bank for International Settlements (BIS) Innovation Hub London Center have tested a distributed ledger technology-powered settlements system between the institutions. The insights of the project will be used by the Bank of England in its real-time gross settlement (RTGSKey takeaways include:

DLT offers significant potential for improving interbank settlement processes.
Project Meridian has demonstrated the feasibility of using DLT in a real-world setting.
The Bank of England is actively exploring ways to incorporate DLT into its RTGS system.
Addressing scalability, interoperability, and regulatory challenges is crucial for widespread adoption.
Ultimately, integrating DLT will provide real benefits to consumers and businesses in the long run.

As the technology evolves and adoption increases, we can expect to see even more innovative applications of DLT emerge, transforming the financial landscape and creating new opportunities for all stakeholders.Want to learn more about how these changes might impact your business or investment strategy? 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) sysConsider following industry news, attending relevant conferences, and consulting with financial professionals to stay informed and prepared for the future of finance.