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How Does a Delivery versus Payment (DVP) System Mitigate Settlement Risk?

Ensures the transfer of the asset only happens simultaneously with the transfer of payment, eliminating principal risk.
Greeks.Live22.11.25

How Does a Delivery versus Payment (DVP) System Mitigate Settlement Risk?

A Delivery Versus Payment (DVP) system ensures that the transfer of the underlying asset (Delivery) occurs only if the corresponding transfer of funds (Payment) also occurs simultaneously. This eliminates the principal risk of a party delivering the asset but not receiving the payment, or vice versa, thereby significantly reducing settlement risk and counterparty exposure.

How Does a Settlement Network Achieve “Atomic Settlement”?
What Is the Concept of “Settlement Finality” and Why Is It Critical for DVP?
How Does the Concept of ‘PVP’ (Payment versus Payment) Apply to FX Derivatives?
How Do Blockchain-Based Ledgers Fundamentally Address non-DVP Risk?

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