{ "title": "Distributed Ledger Technology Experiments in Payments and Settlements", "publication": "FinTech Notes, June 24, 2020", "sourceUrl": "https://www.imf.org/en/publications/fintech-notes/issues/2020/06/25/distributed-ledger-technology-experiments-in-payments-and-settlements-49251", "canonical": "https://www.imf.org/en/publications/fintech-notes/issues/2020/06/25/distributed-ledger-technology-experiments-in-payments-and-settlements-49251", "overlayPath": "/en/publications/fintech-notes/issues/2020/06/25/distributed-ledger-technology-experiments-in-payments-and-settlements-49251/index.md", "summary": "Major transformations in payment and settlements have occurred in generations. The first generation was paper-based. Delivery times for payment instruments took several days domestically and weeks internationally. The second generation involved computerization with batch processing.", "sections": [ { "heading": "Publication metadata", "content": "- Authors: Ghiath Shabsigh, Tanai Khiaonarong, Harry Leinonen\n- Date: June 24, 2020\n- Series: FinTech Notes No. 2020/001\n- Issue: 001\n- Volume: 2020\n- Pages: 22\n- DOI: https://doi.org/10.5089/9781513536330.063\n- ISBN: 9781513536330\n- ISSN: 2664-5912\n- Subjects: Asset and liability management; Banking; Blockchain and DLT; Credit risk; Financial markets; Financial regulation and supervision; Liquidity; Payment systems; Securities settlement systems; Technology\n- Keywords: Blockchain and DLT; counterparty; Credit risk; distributed ledger technology; DLT implementation; DLT payment transaction; DLT prototype; DLT solution; FTN; Global; Liquidity; market; Payment systems; permissioned DLT network; Securities settlement systems; settlement system; transaction" }, { "heading": "Historical context and generational evolution of payment and settlement systems", "content": "- First generation: paper-based; delivery times for payment instruments took several days domestically and weeks internationally.\n- Second generation: computerization with batch processing; links between payment systems were made through manual or file-based interfaces; long change-over periods and residual use of paper-based instruments like checks and cash.\n- Third generation (emerging): electronic and mobile payment schemes enabling integrated, immediate, and end-to-end payment and settlement transfers; example: real-time gross settlement systems available in almost all countries." }, { "heading": "Role and potential of DLT in next-generation payments and settlements", "content": "- DLT has been viewed as a potential platform for the next generation of payment systems, enhancing the integration and the reconciliation of settlement accounts and their ledgers.\n- Experiments with DLT point to potential shifts in financial infrastructures toward:\n - real-time settlement,\n - flatter structures,\n - continuous operations,\n - global reach.\n- Testing in large-value payments and securities settlement systems has partly demonstrated the technical feasibility of DLT for this environment." }, { "heading": "Technical and operational issues examined in DLT experiments", "content": "- Projects analyzed issues associated with:\n - operational capacity,\n - resiliency,\n - liquidity savings,\n - settlement finality,\n - privacy." }, { "heading": "Practical DLT-enabled capabilities demonstrated or facilitated", "content": "- DLT-based solutions can facilitate:\n - delivery versus payment of securities,\n - payment versus payment of foreign exchange transactions,\n - efficient cross-border payments." }, { "heading": "Summary of substantive findings", "content": "- Generational change in payment systems has progressed from paper to computerized batch processing to near-real-time electronic/mobile schemes.\n- DLT experiments suggest technical feasibility for parts of the payments and securities settlement stack, with demonstrated potential benefits in settlement speed, system structure, and cross-border reach.\n- Key operational concerns remain central to evaluation: capacity, resiliency, liquidity efficiency, finality, and privacy.\n\nDistributed Ledger Technology Experiments in Payments and Settlements, FinTech Notes 2020, 001; Ghiath Shabsigh, Tanai Khiaonarong, Harry Leinonen; June 24, 2020.\n\n---\n\n Content in this bundle\n\n- Distributed Ledger Technology Experiments in Payments and Settlements; June 24, 2020\n - Distributed Ledger Technology Experiments in Payments and Settlements; June 24, 2020 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Distributed Ledger Technology Experiments in Payments and Settlements; June 24, 2020 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/fintech-notes/issues/2020/06/25/distributed-ledger-technology-experiments-in-payments-and-settlements-49251" } ], "bullets": [ "[Markdown version](/en/publications/fintech-notes/issues/2020/06/25/distributed-ledger-technology-experiments-in-payments-and-settlements-49251/index.md)", "[Structured JSON version](/en/publications/fintech-notes/issues/2020/06/25/distributed-ledger-technology-experiments-in-payments-and-settlements-49251/index.json)", "[Bundle manifest](/en/publications/fintech-notes/issues/2020/06/25/distributed-ledger-technology-experiments-in-payments-and-settlements-49251/bundle-manifest.json)", "Authors: Ghiath Shabsigh, Tanai Khiaonarong, Harry Leinonen", "Published: June 24, 2020", "Series: FinTech Notes", "DOI: https://doi.org/10.5089/9781513536330.063", "Authors: Ghiath Shabsigh, Tanai Khiaonarong, Harry Leinonen", "Date: June 24, 2020", "Series: FinTech Notes No. 2020/001", "Issue: 001", "Volume: 2020", "Pages: 22", "DOI: https://doi.org/10.5089/9781513536330.063", "ISBN: 9781513536330", "ISSN: 2664-5912", "Subjects: Asset and liability management; Banking; Blockchain and DLT; Credit risk; Financial markets; Financial regulation and supervision; Liquidity; Payment systems; Securities settlement systems; Technology", "Keywords: Blockchain and DLT; counterparty; Credit risk; distributed ledger technology; DLT implementation; DLT payment transaction; DLT prototype; DLT solution; FTN; Global; Liquidity; market; Payment systems; permissioned DLT network; Securities settlement systems; settlement system; transaction", "First generation: paper-based; delivery times for payment instruments took several days domestically and weeks internationally.", "Second generation: computerization with batch processing; links between payment systems were made through manual or file-based interfaces; long change-over periods and residual use of paper-based instruments like checks and cash.", "Third generation (emerging): electronic and mobile payment schemes enabling integrated, immediate, and end-to-end payment and settlement transfers; example: real-time gross settlement systems available in almost all countries.", "DLT has been viewed as a potential platform for the next generation of payment systems, enhancing the integration and the reconciliation of settlement accounts and their ledgers.", "Experiments with DLT point to potential shifts in financial infrastructures toward:", "Testing in large-value payments and securities settlement systems has partly demonstrated the technical feasibility of DLT for this environment.", "Projects analyzed issues associated with:", "DLT-based solutions can facilitate:", "Generational change in payment systems has progressed from paper to computerized batch processing to near-real-time electronic/mobile schemes.", "DLT experiments suggest technical feasibility for parts of the payments and securities settlement stack, with demonstrated potential benefits in settlement speed, system structure, and cross-border reach.", "Key operational concerns remain central to evaluation: capacity, resiliency, liquidity efficiency, finality, and privacy.", "**Distributed Ledger Technology Experiments in Payments and Settlements; June 24, 2020**" ], "related": [ { "title": "Distributed Ledger Technology Experiments in Payments and Settlements; June 24, 2020", "role": "document", "sourceUrl": "https://www.imf.org/-/media/files/publications/ftn063/2020/english/ftnea2020001.pdf", "summary": { "path": "/-/media/files/publications/ftn063/2020/english/ftnea2020001.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/ftn063/2020/english/ftnea2020001.pdf", "mime": "application/pdf" } } ], "alternates": { "markdown": "/en/publications/fintech-notes/issues/2020/06/25/distributed-ledger-technology-experiments-in-payments-and-settlements-49251/index.md", "json": "/en/publications/fintech-notes/issues/2020/06/25/distributed-ledger-technology-experiments-in-payments-and-settlements-49251/index.json", "bundleManifest": "/en/publications/fintech-notes/issues/2020/06/25/distributed-ledger-technology-experiments-in-payments-and-settlements-49251/bundle-manifest.json" }, "generatedAtUtc": "2026-09-21T14:53:07.370Z" }