Payment and settlement systems

Nir Kshetri

Chapter 6 in The Rise of Blockchains, 2026, pp 100-117 from Edward Elgar Publishing

Abstract: This chapter explores how blockchain technology is fundamentally restructuring global financial systems by enabling near real-time, peer-to-peer payment and settlement. It analyzes the transition from traditional fiat-based systems to decentralized alternatives, including cryptocurrencies, stablecoins, and Central Bank Digital Currencies (CBDCs) like the Bahamian Sand Dollar and Nigeria's eNaira. The discussion highlights substantial efficiency gains in international remittances, where blockchain solutions like Ripple and Stellar significantly reduce transaction fees and settlement times compared to legacy providers. Additionally, the chapter examines the rise of Decentralized Finance (DeFi) and innovative instruments, such as flash loans, which utilize smart contracts to eliminate intermediaries. Case studies, including the World Food Programme's “Building Blocks” initiative, demonstrate blockchain's capacity to provide secure identity and financial aid to unbanked populations. Ultimately, the chapter argues that blockchain mitigates counterparty risk and enhances financial inclusion, particularly in emerging economies facing hyperinflation or a lack of banking infrastructure.

Keywords: Decentralized Finance (DeFi); Central Bank Digital Currencies (CBDC); International Remittances; Stablecoins; Settlement Finality; Financial Inclusion (search for similar items in EconPapers)
Date: 2026
ISBN: 9781035394333
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