Bank of England tests instant settlement for tokenised assets

By Aarav Garg

The Bank of England has advanced its experimentation with next-generation market infrastructure through the Synchronisation Lab, a testing environment focused on enabling real-time settlement of tokenised assets alongside central bank money.

The Lab has been designed to explore how the Bank’s renewed real-time gross settlement system, known as RT2, can support “synchronisation”, the coordinated transfer of assets and cash to enable atomic settlement. This model has ensured that transactions complete instantly and simultaneously, reducing counterparty and settlement risk.

Building on earlier findings from Project Meridian, which demonstrated the technical feasibility of synchronisation, the Lab has provided a more realistic environment for industry testing. A total of 18 organisations have been selected to participate, reflecting growing interest in tokenised settlement models.

Participants have been tasked with demonstrating how their systems interact with RT2 and with other stakeholders, including banks, asset ledger operators and end users. The initiative has aimed to validate design choices, assess interoperability and evaluate how synchronised settlement could function across different use cases.

The Lab has also supported broader ecosystem readiness by allowing firms to test end-to-end transaction flows and explore potential business models. While not a live environment, it has offered a structured setting to simulate real-world conditions.

Ciarán McGonagle, Chief Legal & Product Officer at Tokenovate, commented, “Settlement is where the underlying fragmentation of otherwise digital markets is most clearly exposed. The Synchronisation Lab is an important step in exploring how asset and cash movements can be coordinated across systems in a legally robust way, and in testing how synchronised payments through RTGS could shape future wholesale market infrastructure.

The work has complemented other UK initiatives, including the Digital Securities Sandbox, as authorities prepare for a shift towards tokenised financial markets. As settlement models evolve, the Synchronisation Lab has provided early insight into whether existing infrastructure can support faster, more integrated forms of asset transfer.