Payment versus Payment

Definition ∞ 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.

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→Payment versus Payment

→Institutional Blockchain

→Distributed Ledger Technology

Global Banks Invest $135 Million in DLT Wholesale Settlement Platform

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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→Eurosystem TARGET Services

→Monetary Sovereignty

→Financial Market Infrastructure

ECB Expands DLT Settlement Trials with Forty-Nine Financial Institutions

This expansion integrates DLT into core wholesale settlement infrastructure, radically reducing counterparty risk and optimizing capital efficiency across the Eurozone.

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→Cross-Border Settlement

→Wholesale Payments

→Programmable Money

Major Banks Pilot Tokenized Deposits for Instant Cross-Border FX Settlement

The live pilot of tokenized bank liabilities on DLT enables atomic, 24/7 cross-border FX settlement, eliminating correspondent banking friction and reducing capital lockup.

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→Delivery versus Payment

→Central Bank Digital Currency

→Enterprise Blockchain

Brazil and Hong Kong Central Banks Pilot Cross-Border DLT Trade Settlement

Linking two CBDC networks via an interoperability layer enables atomic DvP settlement, collapsing trade finance risk and optimizing global working capital flow.

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→Cross-Chain Interoperability

→Shared Ledger Technology

→Programmable Payments

Brazil and Hong Kong Central Banks Complete Cross-Chain Trade Settlement Pilot

The DvP/PvP solution leverages CCIP for atomic, cross-chain settlement, dramatically lowering counterparty risk and unlocking SME global market access.

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→Central Bank Digital Currency

→Digital Asset Standards

→FX Risk Mitigation

Central Banks Partner to Standardize DLT Cross-Border Settlement and FX Risk

Central banks are establishing DLT workstreams to drive atomic settlement and interoperability, directly mitigating systemic Herstatt risk in global FX markets.

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→Financial Services Agency

→Shared Ledger Infrastructure

→Digital Asset Infrastructure

Japan’s Megabanks Launch Joint Yen Stablecoin Pilot for Corporate Settlement

The joint issuance of a regulated, yen-pegged digital instrument on DLT streamlines inter-company payments, optimizing corporate treasury liquidity and reducing cross-border friction.

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→Digital Currency Payments

→DLT Interoperability

→Blockchain Connectors

Citi and Swift Validate Hybrid DLT for Fiat-Digital Payment Settlement

The hybrid DLT model leverages Swift’s existing messaging standard with blockchain-native atomic settlement to eliminate counterparty risk in cross-currency flows.

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→Collateral Management

→Post-Trade Efficiency

→Liquidity Management

Fnality Launches World’s First Regulated DLT-Based Wholesale Sterling Payment System

The system tokenizes central bank funds for instant, risk-free atomic settlement, optimizing intraday liquidity and unlocking digital asset market utility.

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→Interoperability

→Payment versus Payment

→Financial Market Infrastructure

Central Banks Pilot Synchronized DLT for Atomic Cross-Border FX Settlement

Multi-jurisdictional central bank collaboration leverages DLT to achieve real-time, atomic FX settlement, structurally eliminating counterparty and Herstatt risk in global currency exchange.