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The Depository Trust and Clearing Corporation (DTCC) is developing a prototype to test the ability of US clearing and settlement infrastructure to support a Fed-issued CBDC using a distributed ledger technology (DLT) platform. Project Lithium will measure the benefits of a CBDC and inform the future design of the Depository's clearing and settlement offerings. It will also explore how a CBDC could enable atomic settlement, a conditional settlement that occurs if delivery and payment are both received at the same time.

The Bank of England (BoE) published its roadmap for the real-time gross settlement (RTGS) service beyond 2024 that was informed by public responses to the consultation paper published in April 2022. The objective of modernizing the RTGS service is to offer a more accessible, functional and resilient platform for digital settlement in central bank money. The roadmap pushes back on the idea of putting wholesale payments on distributed ledger technology (DLT) (e.g., via "wholesale central bank digital currency (CBDC)") rails. It points out that the RTGS Renewal Programme will realize a number of benefits commonly associated with such platforms more quickly than it would be possible to launch an entirely new wholesale settlement platform and achieve scale in its usage.

The Committee on Payments and Market Infrastructures (CPMI) published the final report on the facilitation of increased adoption of payment versus payment (PvP) to reduce foreign exchange (FX) settlement risk and improve cross-border payments. It analyses the causes of non-PvP settlement, takes stock of existing and proposed new PvP solutions and suggests roles for the private and public sectors to facilitate increased adoption of PvP. The report finds that existing PvP arrangements have been successful at reducing settlement risk for much of the FX market, but certain market segments remain exposed to risk: PvP arrangements are not available for all currencies and may not be the preferred solution of some market participants or for settling certain trades. New PvP solutions can complement the existing arrangements by providing flexibility and functionalities such as real-time settlement or 24/7 operations, expanding coverage to the retail market, and supporting emerging market currencies.

Wedbush Securities will begin using blockchain technology to settle certain stock trades, using Paxos on a pilot basis. Paxos recently tested same-day settlement of trades on the blockchain. Paxos currently operates its blockchain-based settlement system under a "no-action" promise from the U.S. Securities and Exchange Commission (SEC). Meanwhile, Paxos is applying to become a clearing agency with the SEC, which would make the cryptocurrency custodian one of just two clearing agencies in the U.S., joining the Depository Trust & Clearing Corporation (DTCC).

Banca d'Italia and Deutsche Bundesbank have been ramping up their efforts to utilize distributed ledger technology (DLT) in central bank money settlements. The initiatives aim to complement current central bank money settlement practices with programmable trigger mechanisms that connect DLT-based assets, like tokenized securities, and cash to be settled via conventional payments systems. This could be seen as complementary to the Digital Euro, which is currently under consideration.

"MAS and Singapore Exchange (SGX) announced that it is collaborating to develop Delivery versus Payment (DvP) capabilities for settlement of tokenised assets across different blockchain platform. This will allow financial institutions and corporate investors to carry out simultaneous exchange and final settlement of tokenised digital currencies and securities assets, improving operational efficiency and reducing settlement risks. Three companies, Anquan, Deloitte and Nasdaq were appointed as technology partners for this project. They will leverage the open-source software developed and made publicly available in Project Ubin Phase 2."

On July 18, 2023 the European Central Bank (ECB) New Technologies for Wholesale settlement Contact Group (NTW-CG) held its second meeting. The Group is exploring how to settle DLT transactions with central bank money, including a wholesale CBDC. The pilots will be open to financial institutions with access to the TARGET payment system, with the onboarding to start later in 2023 and tests to commence in Q2 2024. Three interoperability-type solutions will be tested. Deutsche Bundesbank and Banca d'Italia will test two different non-CBDC solutions that initiate payments on TARGET and use trigger chains to instruct the DLT-based securities settlement platform to transfer ownership of securities as soon as payment is confirmed. The Banque de France will test a wholesale CBDC token option based on its previous trials, in which settlement will be enabled through interoperability with multiple other DLT ledgers.

he Bank for International Settlements (BIS) and the Inter-American Development Bank (IDB) are joining forces to foster innovation and financial inclusion in Latin America and the Caribbean by exploring and developing technology that can help to modernise the region's financial systems. The first collaboration between the two institutions will be on Project FuSSE (Fully Scalable Settlement Engine, pronounced as fyooz). Project FuSSE aims to design and test backend functionality that can be adapted to multiple types of infrastructures, allowing them to process a continuously growing number of transactions. FuSSE aims to test highly scalable systems in three dimensions: the number of transactions, the types of assets and the number of participants. The technology could support payment systems, security settlement systems or even central bank digital currencies.

In August the Depository Trust & Clearing Corporation (DTCC) DLT-based Project Ion platform for stock settlement went into production. The R3 Corda-based platform runs in parallel with the DTC's classic settlement system, which remains the definitive record. At this stage, Project Ion is designed to only deal with bilateral equity transactions but is already processing an average of 100,000 transactions per day.

The Asian Development Bank (ADB) completed its Project Tridecagon proof-of-concept (PoC) probing into the viability of cross-border delivery-versus-payment (DVP) bond settlements using blockchain technology. It connected key market infrastructures: central banks' real-time gross settlement systems (RTGS) and central securities depositories' (CSD) book-entry systems, but did not use central bank digital currency (CBDC). The settlement of cross-border securities transactions was proven in principle and across different vendor solutions, but full application may depend on necessary changes to legal and regulatory prescriptions which could take years.

Goldman Sachs, BNP Paribas and DTCC joined Fnality's £77.7 million Series B funding round. Formerly called Utility Settlement Coin, Fnality plans to offer a wholesale payment and settlement platform using stablecoins backed by deposits at central banks. So far it's operational only in the U.K., where banks can transfer money from their Bank of England accounts to the Fnality UK central bank account where it's tokenized. Because the money is tokenized it enables instant atomic securities transaction settlement. One of the intended use cases is cross currency payments, but that will need the cooperation of other central banks, which has been slow in coming. https://www.fnality.org/news-views/fnality-international-raises-77.7m-in-series-b-funding-round

December 1, 2023 saw the world's first commercial settlements of digital securities transactions with real wholesale CBDC on a regulated distributed ledger technology (DLT) based financial market infrastructure (SDX). One was a CHF 105 million franc digital four-year bond issued by the Canton of Basel-Stadt, and the second was a CHF 100 million digital 11-year bond issued by the Canton of Zurich. The wholesale CBDC was issued by the Swiss National Bank as part of Helvetia III. In addition to the settlement on the SDX platform, part of the settlement took place on SIX SIS, the national central securities depository (CSD) of the Swiss financial market and an International Central Securities Depository (ICSD), which runs a node on SDX.

The European Central Bank (ECB) is calling for expressions of interest from financial market stakeholders to take part in trials with central bank money settlement and in experiments with mock settlement in a test environment. The trials and experiments will be conducted with three Eurosystem solutions enabling wholesale financial transactions recorded on distributed ledger technology (DLT) platforms to be settled in central bank money in the T2 real-time gross settlement system (RTGS) operated by the Eurosystem.

The Banque de France successfully completed the last experiment of its program for interbank settlements in wholesale central bank digital currency (CBDC), launched in March 2020. This final experiment involved the issuance of a digital bond on a blockchain and subscription with settlement in It successfully tested an end-to-end digital asset transactional lifecycle, through issuance, subscription by several actors, and coupon payment involving a conversion into another currency. All those transactions occurred across different blockchain environments operated by HSBC for the custody of the assets, and by the Banque de France for the securities settlement and the CBDC. The next phase of the Banque's CBDC experiments will be mainly dedicated to cross-border transactions.

Mitsubishi UFJ Trust hopes to bring about instant settlement of securities transactions by using blockchain for trading and a Japanese yen-pegged stablecoin for payment. It will be similar to JPM Coin by JPMorgan, which is focused on speeding up wholesale payments such as bond transactions. Mitsubishi UFJ is looking to make settlements instantaneous, versus the couple of days it now takes.

The Swiss National Bank (SNB) plans to continue with the wholesale central bank digital currency (CBDC) securities settlement experimentation (Project Helvetia) that was concluded in January 2022. That had tested the issuance and settlement of tokenized securities with wholesale CBDC on the SIX Digital Exchange (SDX). In the next phase, the SNB will issue wholesale CBDC on SDX and test selected transactions with market participants. They will also test the use of "synthetic" wholesale CBDC (privately-issued stablecoins backed by SNB deposits) in a similar context. The SNB will also experiment with the processing of tokenized securities in which the payment leg is synchronized via a link to the Swiss Interbank Clearing (SIC) real-time gross settlement (RTGS) system, which also tested in the first phase of Project Helvetia. Such synchronization turned out to be technically possible but clunky compared to integrated processing, since the DLT functionalities had been restricted. As part of the new project, it will be investigated whether these disadvantages can be minimized by making adjustments to the SIC system or to the link itself.

US Federal Reserve Board (FRB) Governor Christopher Waller spoke about the potential benefits and risks of blockchain-based asset tokenization and related the use of smart contracts. In particular, he pointed to the way that smart contract-enabled atomic settlement can mitigate settlement and counterparty credit risks by ensuring that the buyer will not pay if the seller does not deliver; and conversely, that the seller will not deliver if the buyer does not pay. However, smart contracts can have bugs and potential cyber vulnerabilities; and instantaneous settlement raises its own set of risks.

The Inter-American Development Bank (IDB) provided an update on Project FuSSE (Fully Scalable Settlement Engine), a joint project with the Bank for International Settlements (BIS) Innovation Hub and Bank of Canada. It is an initiative that offers open-source technology among central banks to facilitate the implementation of payment systems and other settlement infrastructures to advance financial inclusion Latin America and the Caribbean. It will also provide technical assistance for regulatory design and institutional capacity improvement.

The European Central Bank (ECB) published the list of the first institutions to participate in its trials of the settlement of wholesale transactions on distributed ledger technology (DLT) based platforms using central bank money. The list is comprised of five central banks, ten institutions, six market DLT operators and five central banks. The trials will involve real transactions as well as mock simulations, with most of the tests focusing on securities settlement. There also plans to consider use cases for payment versus payment (FX) and cross border payment. Three settlement solutions are part of the trials, provided by the central banks of Germany (RTGS-based "trigger" solution), France (wholesale central bank digital currency (CBDC) solution) and Italy (TIPS Hashlink solution). https://www.ecb.europa.eu/press/intro/news/html/ecb.mipnews240403.en.html

The Central Bank of Brazil has kicked off a new phase in the testing process for Pix, the upcoming national instant payments platform, with the simulation of transfers. The tests of the technology underpinning the settlement infrastructure will see participating institutions testing their settlement flows, so the process where resources are transferred from the payer to the recipient, with fictitious data.