The Bank of England last week announced the completion of Project Meridian, a digital synchronised settlement prototype that aims to digitise and speed-up property transactions.
It comes after a collaboration between the Bank of England, HM Land Registry, Bank of International Settlements and property blockchain network Coadjute.
Rather than risking delays from buyers, conveyancers and lenders pushing individual payments between accounts on completion, the prototype replaces the numerous manual steps and avoids the exchanging of paper-based documents entirely, cutting the risk of fraud or transactions being delayed at the eleventh hour.
The settlement prototype works by digitising the workflow between the commercial Banks, the Bank of England and HM Land Registry.
Conveyancers connect to the service and send instructions which reserve funds.
Then, at a pre-set date and time, the funds for that property transaction, or even for a whole chain of transactions, are moved in synchronisation.
The funds are moved immediately, digital deeds are issued, and instructions sent to HM Land Registry to update the register.
The prototype paves the way for the process to be made significantly more transparent and efficient, and reduces the risk of fraud.
It will take time for buyers and sellers to benefit from this though as The Bank of England said it will use the insights from the project to inform their work beyond 2024.
John Reynolds, project director and chief operating officer at Coadjute, said: “Settlement is particularly complex and can only be tackled through deep collaboration and partnership with the public sector.
“What the Bank for International Settlements (BIS) Innovation Hub London Centre has done fantastically well here is create an open, innovative and collaborative environment for the public and private sector to work together to do just that.”
Dan Salmons, chief executive at Coadjute, added: “I've spent most of my working life leading payments innovations in Banks and FinTechs - I was there in the early days of contactless cards and mobile payments - so know first-hand what it looks like at the start of a genuine change to the way we all move money.
“Few payments are more important than those for property, and the work the Bank of England, HM Land Registry, Bank of International Settlements and Coadjute have done to reimagine the settlement process is extraordinary. We look forward to seeing the impact this project will have on shaping the future of property transactions.”
Read the full report: https://www.bis.org/publ/othp63.htm