What Is Atomic Settlement?

Michael Lee, Antoine Martin and Benjamin Müller

No 20221107, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: Distributed ledger technologies (DLTs) have garnered growing interest in recent years and are making inroads into traditional finance. One purported benefit of DLTs is their ability to bring about “atomic” settlement. Indeed, several recent private sector projects (SDX, Fnality, HQLAx) aim to do just that. But what exactly is atomic settlement? In this post, we explain that atomic settlement, as it is often defined, combines two distinct properties: instant settlement and simultaneous settlement, which should be kept separate.

Keywords: Intermediation (Finance); atomic settlement; distributed ledger technology; digital assets (search for similar items in EconPapers)
JEL-codes: E42 G2 (search for similar items in EconPapers)
Date: 2022-11-07
New Economics Papers: this item is included in nep-ban
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