Faster settlement refers to the reduction in time required to finalize a financial transaction. In traditional finance, settlement can take days, but blockchain technology and other digital payment systems aim to reduce this to minutes or even seconds. This acceleration minimizes counterparty risk and liquidity constraints, enhancing capital efficiency across markets. It is a significant benefit for high-volume trading and cross-border payments.
Context
The push for faster settlement is a central theme in modernizing global financial infrastructure, with central banks and private entities exploring various distributed ledger technologies. A key discussion point involves balancing speed with security and regulatory compliance, particularly for large-value transactions. Future developments will likely include real-time gross settlement systems built on DLT, further integrating digital assets into mainstream financial operations.
Leveraging public permissioned DLT for tokenized fund settlement validates a systemic shift toward T+0 finality, drastically improving capital efficiency for asset managers.
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