Real-Time Gross Settlement (RTGS) is a system for processing financial transactions individually and continuously, without netting them with other transactions. Each transfer is settled immediately upon processing, providing finality and reducing settlement risk. This system is crucial for high-value payments and central bank operations, ensuring the instantaneous and irreversible transfer of funds. RTGS systems are vital for maintaining financial system stability.
Context
Real-Time Gross Settlement systems are increasingly relevant in discussions surrounding the modernization of payment infrastructure, including the integration of blockchain technology. Central banks are exploring how RTGS principles can be applied to central bank digital currencies (CBDCs) to enable instant and secure digital payments. The ongoing focus involves enhancing the speed and efficiency of interbank settlements and potentially extending these capabilities to broader financial markets.
The bank’s strategic deployment of a deposit-backed token on a public Layer-2 network standardizes the on-chain cash settlement layer, optimizing capital efficiency and mitigating counterparty risk for institutional clients.
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