Wholesale Bond Settlement refers to the process of completing transactions for large-value bonds exchanged between financial institutions, typically involving institutional investors and banks. This involves the transfer of both the bond securities and the corresponding cash payments. Distributed ledger technology is being explored to enhance the efficiency of this process.
Context
Wholesale Bond Settlement is a critical area where distributed ledger technology (DLT) is being investigated for its potential to reduce settlement times and costs. Discussions often center on the benefits of atomic settlement, where securities and cash are exchanged simultaneously. Observing pilot programs conducted by central banks and financial market infrastructures provides insight into the modernization of bond markets.
This consortium-led pilot leverages tokenized deposits as a regulated settlement layer, drastically cutting counterparty risk and friction in wholesale and retail transactions.
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