This describes a process where the transfer of assets and the corresponding payment occur simultaneously and irrevocably. It eliminates settlement risk by ensuring that neither party delivers its side of a transaction without receiving the other side. This mechanism is crucial for reducing counterparty exposure in financial markets.
Context
Synchronized settlement is a key benefit often cited for blockchain-based financial systems, particularly for digital assets. The ability of distributed ledger technology to execute atomic swaps and instant value transfers promises to significantly reduce settlement delays and associated risks compared to traditional financial infrastructure.
The BoE is architecting RTGS interoperability with DLT platforms to enable atomic settlement and unlock significant capital efficiencies across the financial ecosystem.
We use cookies to personalize content and marketing, and to analyze our traffic. This helps us maintain the quality of our free resources. manage your preferences below.
Detailed Cookie Preferences
This helps support our free resources through personalized marketing efforts and promotions.
Analytics cookies help us understand how visitors interact with our website, improving user experience and website performance.
Personalization cookies enable us to customize the content and features of our site based on your interactions, offering a more tailored experience.
