SETTLEMENT AND PAYMENTS INFRASTRUCTURE

Atomic Settlement

The simultaneous, conditional exchange of two assets in a single blockchain transaction—both legs complete or neither does—eliminating the gap between trade execution and final settlement that creates counterparty risk in traditional markets.

EXAMPLE

Atomic settlement of tokenized Treasuries versus stablecoins achieves true delivery-versus-payment with no T+1 lag and no central counterparty required.

Relevant Roles and Functions

On-chain Role
Head of Digital Settlement Infrastructure
Function
Atomic Settlement Architecture
Blockchain-based Settlement Networks
Delivery-versus-payment Systems
Integration with Clearing Systems
Tokenized Asset Settlement
TradFi Equivalent
DTCC Connectivity
Payment Settlement Rails
Securities Clearing

Related Terms

Counterparty Risk

The risk that the opposing party in a financial transaction defaults before settlement is complete. Atomic on-chain settlement targets the elimination of counterparty risk by making asset exchange simultaneous and conditional.

Example

Blockchain-based bilateral settlement reduces counterparty risk by making payment and delivery inseparable rather than relying on a clearing intermediary.

Settlement Finality

The point at which a transaction is irrevocably complete and the transferred assets are unconditionally owned by the recipient. On-chain systems can achieve near-instant finality, replacing the deferred finality of traditional clearinghouses.

Example

On-chain settlement finality eliminates the intraday credit exposures that central counterparties currently absorb on behalf of clearing members.

Tokenized Deposit

A bank-issued, blockchain-based representation of a commercial bank deposit that moves on distributed ledger infrastructure while remaining a liability of the issuing bank—distinct from a stablecoin, which is typically issued by a non-bank entity.

Example

Citi's tokenized deposit pilot allows corporate clients to move cash between subsidiaries in real time on a permissioned ledger, with the same credit standing as a traditional deposit.

Smart Contract

Self-executing code deployed on a blockchain that automatically enforces and carries out the terms of an agreement when predefined conditions are met—without requiring an intermediary to oversee performance.

Example

A smart contract can automatically release collateral when a loan is repaid, eliminating manual processing and reducing operational risk.