Bangkok: The Bank of Thailand (BOT) has entered into a Memorandum of Understanding (MoU) with the Bank of England (BoE) and the Monetary Authority of Singapore (MAS) to collaboratively develop and test a prototype payment system aimed at enhancing foreign exchange transactions. This Synchronised FX Settlement system is expected to increase efficiency and mitigate settlement risks associated with foreign exchange transactions.
According to Thai News Agency, the collaboration will focus on creating and interlinking prototype high-value payment systems, known as Simulated Real Time Gross Settlement, in each participating country. The initiative will leverage both centralized and decentralized technologies, including Distributed Ledger Technology (DLT), to facilitate cross-border interoperability. A key component of the testing phase will involve executing foreign exchange transactions by delivering both foreign currencies simultaneously, a process referred to as FX Payment versus Payment.
The outcomes of these tests will be instrumental in shaping recommendations for the development and enhancement of the infrastructure supporting high-value payment systems among financial institutions, specifically the BAHTNET system.