Wholesale transaction settlement refers to the final transfer of high-value funds and securities between financial institutions, typically occurring in large denominations and often involving central banks. These settlements are critical for the functioning of interbank markets, foreign exchange, and securities trading. The process ensures that obligations between parties are discharged, minimizing counterparty risk and maintaining financial system stability. Efficient settlement is vital for market liquidity.
Context
Distributed ledger technology is a significant area of research and development for enhancing wholesale transaction settlement, aiming to reduce settlement times and operational costs. Key discussions involve the use of central bank digital currencies (CBDCs) or tokenized commercial bank money for instantaneous, atomic settlement of wholesale transactions. Future developments will likely see pilot projects and eventual implementation of DLT-based wholesale settlement systems, potentially leading to significant improvements in real-time liquidity management and risk reduction across global financial markets.
The D7 DLT platform tokenizes core financial instruments, establishing a compliant, 24/7 infrastructure layer that unlocks intraday liquidity and mitigates settlement risk for institutional issuers.
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