Bank of England Tests Tokenized Asset Settlement With SWIFT

The Bank of England has selected SWIFT as one of 18 participants in its newly launched Synchronisation Lab, a six-month research initiative focused on enabling atomic settlement between tokenized assets and central bank money.

Scheduled to begin in spring 2026, the pilot will operate within a simulated version of the United Kingdom’s upgraded Real-Time Gross Settlement infrastructure, known as RT2. The objective is to examine how distributed ledger technology can interact with central bank systems to enable instantaneous and synchronized asset transfers.

This initiative builds on the Bank of England’s broader push into tokenized settlement, following its earlier collaboration with Chainlink to test on-chain settlement against central bank money.

Bridging traditional finance and DLT

Within the lab environment, SWIFT will collaborate with institutions including Baton Systems and London Stock Exchange Group to test interoperability between established financial messaging standards and emerging blockchain-based systems.

The pilot focuses on practical coordination rather than live deployment. Participants will connect to a simulated RT2 core ledger using dedicated APIs, ensuring that no real funds are used during testing.

Testing PvP and DvP workflows

One key use case under evaluation is cross-border foreign exchange settlement through Payment-versus-Payment (PvP) mechanisms. The structure ensures that one currency transfer executes only if the corresponding counter-transfer also settles, reducing settlement risk in FX transactions.

The lab will also assess Delivery-versus-Payment (DvP) functionality for tokenized securities, including bonds and gilts. These trials will explore how various technology stacks can integrate with central bank settlement rails to enable synchronized exchange of assets and cash.

Collateral synchronization and liquidity efficiency

In addition to FX and securities settlement, SWIFT will explore synchronized cash movements for collateral optimization. Working alongside firms such as Partior, the lab will evaluate how atomic settlement mechanisms could improve intraday financing and liquidity management across institutions.

Research environment with long-term implications

The Synchronisation Lab is designed as a controlled research setting rather than a production system. The six-month program will inform future decisions regarding the modernization of the UK’s financial infrastructure.

The initiative builds on earlier experimentation conducted through Project Meridian, which demonstrated the technical feasibility of using a synchronization operator to facilitate atomic settlement in central bank money.

Among the selected participants are Chainlink, BNP Paribas, Tokenovate, Baton Systems, LSEG, and SWIFT, reflecting a mix of traditional financial institutions and digital asset infrastructure providers.

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