SETTLEMENT AND PAYMENTS INFRASTRUCTURE

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.

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

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.

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.

Collateral Management

The operational process of identifying, valuing, pledging, and monitoring assets used as security for financial obligations such as derivatives, repo, or margin loans. On-chain collateral management enables real-time substitution and automated margin calls.

Example

Smart contract-driven collateral management at Goldman Sachs' digital asset platform triggers automatic margin top-ups when asset prices breach defined thresholds.