Definition ∞ Wholesale DLT settlement refers to the use of distributed ledger technology for settling large-value transactions between financial institutions, typically involving central bank money or high-value securities. This process aims to streamline interbank transfers, reduce counterparty risk, and shorten settlement cycles from days to near-instantaneous. It represents a significant modernization of traditional financial market infrastructures. This system enhances efficiency and transparency.
Context ∞ Central banks and major financial institutions are actively exploring wholesale DLT settlement, with news often reporting on pilot programs and research initiatives aimed at improving payment systems. Debates focus on the legal frameworks for digital central bank money (CBDCs), interoperability with existing payment rails, and the security implications of a distributed settlement system. Its successful implementation could fundamentally alter the speed and cost of global financial transactions.
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