Key Takeaways:

• The Bank of England has partnered with Chainlink to explore how tokenized assets can settle using central bank money.
• The Synchronisation Lab is a six-month simulation starting in spring 2026.
• The project focuses on “atomic settlement,” meaning assets and payments move at the same time to reduce risk.

The Bank of England (BoE) has teamed up with blockchain network Chainlink, a blockchain oracle network that connects smart contracts to real-world data (like prices, events, and payments) to test how digital, tokenized assets could be settled using central bank money. 

The move is part of a broader effort to modernize the UK’s payment system and explore how traditional finance can work alongside blockchain technology.

Tokenized assets are traditional financial assets, such as stocks, bonds, or real estate, converted into digital tokens on a blockchain, enabling them to be traded and managed online.

The partnership falls under Project Meridian, a Bank of England initiative focused on improving the flow of payments and financial assets between systems.

At the heart of the plan is a new testing platform called the Synchronisation Lab, which will run for six months starting in spring 2026.

The goal is simple: figure out how tokenized assets, like digital bonds or securities, can be settled safely and instantly using central bank money, which are funds held at the bank and not commercial bank deposits.

What Is the Synchronisation Lab?

The Synchronisation Lab is a safe testing environment. It does not use real money. Instead, it simulates how transactions would work between the Bank of England’s payment system (called RT2) and blockchain platforms.

RT2 is the Bank of England’s core payment settlement system for processing and finalizing large-value transactions between financial institutions.

In total, 18 organizations have been selected to participate. These include banks, fintech companies, market infrastructure providers, and blockchain firms like Chainlink.

Participants will test different types of transactions, including:

• Delivery-versus-payment (DvP): Making sure an asset and payment are exchanged at the same time.
• Payment-versus-payment (PvP): Swapping one currency for another instantly.
• Digital money issuance and settlement flows.

In simple terms, the Lab is testing whether digital assets and traditional bank money can “talk” to each other smoothly and settle transactions simultaneously. 

This is often called atomic settlement, meaning both sides of a trade happen at the same time, reducing risk, like exchanging cash and house keys simultaneously, so neither party is left waiting or exposed.

How the tests work

The Bank of England will simulate its settlement engine, user interface, and technical connections (APIs). Companies in the Lab will connect their systems to this setup and test how transactions would move through the process.

The BoE is exploring two main models:

• In one model, the operator sends instructions directly to the BoE’s system before settlement happens.
• In another model, the bank account holder sends the instruction under the operator’s guidance.

The BoE may test additional variations based on feedback.

Once the six-month program ends, participants will present their findings. The BoE plans to publish a report outlining what worked and what needs improvement.

Part of a global push toward digital finance

The UK is not alone in testing tokenized systems. Other central banks are also experimenting with digital assets and programmable payments.

• The US Federal Reserve has explored how smart contracts could improve monetary operations.
• Singapore has launched pilots to support tokenized financial transactions.
• The UAE and China have expanded digital currency trials.

For now, the Bank of England is not launching a digital currency. Instead, it is preparing for a future where digital assets become more common. However, it’s relevant to note this is just a test and no precise plan is on the horizon.

By working with companies like Chainlink, the Bank is testing whether blockchain technology can safely connect with central bank money, potentially shaping the next generation of UK financial infrastructure.