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How Does a “Delivery versus Payment” (DVP) Mechanism Work in Physical Settlement?

The transfer of the asset and the cash payment occur simultaneously to eliminate the risk of one party failing to deliver.
Greeks.Live24.11.25

How Does a “Delivery versus Payment” (DVP) Mechanism Work in Physical Settlement?

Delivery Versus Payment (DVP) is a settlement process where the transfer of the underlying asset (the delivery) occurs simultaneously with the transfer of the cash payment. This mechanism is designed to eliminate "principal risk," which is the risk that one party delivers the asset but does not receive the payment, or vice-versa.

In crypto, DVP ensures the buyer gets the coins at the exact moment the seller receives the fiat or stablecoin.

Explain the Concept of “Delivery versus Payment” (DVP) in the Context of Settlement
How Does a Delivery versus Payment (DVP) System Mitigate Settlement Risk?
What Is the Risk That DVP Is Designed to Eliminate?
What Is “Principal Risk” and Why Is DVP Essential to Mitigate It?

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