DLT bonds in and of themselves do not reduce settlement risk but can be paired with digital or rather, programmed cash solutions. This allows for a DLT bond and digital cash such as a CBDC or tokenised cash to be exchanged simultaneously on the same DLT network, also known as “atomic settlement”, or at least intraday. This DLT-based process is designed to minimise settlement risk through programming the transfers of digital cash and digital bonds only to occur together. In practice, there may be multiple DLT networks involved in this process. See also Q&A 11.
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