What Historical Event Led to the Widespread Adoption of DVP Mechanisms?

The historical event that accelerated the adoption of DVP (Delivery Versus Payment) was the Herstatt Bank failure in 1974. Herstatt Bank was closed by German regulators mid-day after receiving Deutschmark payments but before making corresponding US Dollar payments in New York.

This event highlighted the massive principal risk in foreign exchange transactions and led to global efforts to synchronize settlement, eventually resulting in DVP and later PVP (Payment Versus Payment).