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What Is Atomic Settlement?

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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.

Suggested Citation

  • Michael Junho Lee & Antoine Martin & Benjamin Müller, 2022. "What Is Atomic Settlement?," Liberty Street Economics 20221107, Federal Reserve Bank of New York.
    • Handle: RePEc:fip:fednls:94981
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    File URL: https://libertystreeteconomics.newyorkfed.org/2022/11/what-is-atomic-settlement/
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    Keywords

    Intermediation (Finance); atomic settlement; distributed ledger technology; digital assets;
    All these keywords.

    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • G2 - Financial Economics - - Financial Institutions and Services

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