Payment versus Payment, or PvP, is a settlement mechanism that ensures the simultaneous exchange of two different currencies. This process eliminates principal risk in foreign exchange transactions, meaning neither party delivers one currency without receiving the equivalent value of the other. PvP is a critical component of global financial infrastructure, significantly reducing settlement risk in international payments. It provides a robust framework for currency exchanges.
Context
The development of central bank digital currencies (CBDCs) and tokenized foreign exchange is directly relevant to enhancing Payment versus Payment mechanisms. News often covers pilot projects exploring how DLT can enable real-time, atomic PvP settlements across various currencies, potentially streamlining cross-border liquidity. Regulators and financial institutions are assessing these innovations to improve the safety and efficiency of international money transfers.
This expansion integrates DLT into core wholesale settlement infrastructure, radically reducing counterparty risk and optimizing capital efficiency across the Eurozone.
The $135 million Series C accelerates the deployment of central bank-backed tokenized money for T+0 interbank settlement, mitigating systemic counterparty risk.
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