DvP using CBDC: a "settlement choice model" for securities settlement - 0 views
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John Kiff on 22 Dec 21A paper from R3 proposes a new securities settlement model that offers the ability to settle both gross and netted trades instantly using central bank digital currency (CBDC) and digital assets on a blockchain infrastructure. Existing delivery versus payment models exist on a continuum from intraday gross settlement-which minimizes settlement risk while requiring a great deal of liquidity-to delayed batch settlement-which offers netting efficiencies but delays final settlement. Market participants acknowledge the benefits of real time gross settlement but continue to rely on the operational and liquidity advantages of delayed batch settlement. The R3 model purports to be a "best of both worlds" model.