The Bank of England intends to learn from this project and incorporate the insights gained into its real-time gross settlement (RTGS) system.
In addition, BIS has released a 44-page report on the initiative known as Project Meridian, which was conducted at the BIS innovation hub in London in collaboration with the Bank of England.
As per the report, the banks were able to purchase houses in England and Wales using a synchronization network that employs distributed ledger technology (DLT).
The report suggests that the process of transmitting messages between the synchronization network and the RTGS system could be effortlessly applied to other asset classes.
Furthermore, the report emphasizes the potential benefits that this settlement system could offer to central bank digital currencies (CBDCs), stating that:
“Synchronisation can provide a catalyst for innovation in wholesale payments and support the emergence of new payments infrastructures that settle using central bank money.”
Project Meridian identifies several possible problems with the use of the system. One of these is the challenge that network operators would encounter when trying to establish identity verification. Additionally, the document notes that synchronization services will be restricted to RTGS service hours.
Several legal concerns need to be addressed, including determining the ultimate point where settlement becomes irrevocable and finding a way to digitally represent asset ownership.
In March of this year, the BIS revealed that it had finished Project Icebreaker, a different trial that examined the use of CBDCs in international retail and remittance scenarios. The project had the participation of the central banks of Israel, Norway, and Sweden.
