DvP (Delivery versus Payment)

What it removes and what it does not. The CPSS report on DvP of September 1992 explains that, without that link, the seller can deliver and not be paid, or the buyer can pay and not receive, and that this risk covers the full value of the trade (paras. 1.7 and 1.8). DvP removes it, but the parties are still exposed to replacement cost risk and liquidity risk (para. 1.8). The PFMI add that DvP does not require both legs to settle at the same instant: it is enough that the finality of one depends on the finality of the other (Principle 12, paragraphs 3.12.3 and 3.12.4).

The three BIS models. The 1992 report (para. 1.9), which the PFMI carry over in Annex D, sets out three ways to achieve DvP:

Payment versus delivery, PvP and DvD. People searching for "payment versus delivery" are looking for the same idea, but neither the PFMI nor the CSDR use that phrase: they say DvP. The PFMI do include two variants: PvP (payment versus payment), which links two payments in different currencies, and DvD (delivery versus delivery), which links two deliveries of securities (footnote 113).

DvP in the EU today. Article 39(7) of the CSDR requires securities-against-cash transactions between direct participants in a securities settlement system operated by a central securities depository to settle on a DvP basis (in Spain, Iberclear). The deadline for trades on trading venues is T+2 today (CSDR Article 5(2)); Regulation (EU) 2025/2075 shortens it to T+1 from October 11, 2027.

DvP on DLT. If the security and the money sit on the same distributed ledger, a smart contract can execute both legs in a single transaction: either both move or neither does ("atomic" settlement). The EBA describes such a case in the EEA: a credit institution recorded deposits and securities on its own private, permissioned DLT to settle on a DvP basis (EBA/REP/2024/24 report, December 2024). If the money sits on another ledger, a bridge between the two is needed. Technical atomicity does not, on its own, provide legal finality: the pilot regime requires mitigating the risk that a DLT system is not recognized under Directive 98/26/EC on settlement finality, especially in insolvency (Article 5(7)(c) of Regulation (EU) 2022/858).

DLT SS under the pilot regime. The EU DLT Pilot Regime (Regulation (EU) 2022/858, applicable since March 23, 2023 under Article 19(2)) defines a DLT settlement system (DLT SS) as one that settles transactions in DLT financial instruments "against payment or against delivery" (Article 2(7)). Only an authorized central securities depository can operate one (Article 9(1)). It can be exempted from CSDR Article 40 (cash settlement) if it settles on a DvP basis. In that case, payments settle in central bank money, including in tokenized form, where practical and available; otherwise, through the depository's own accounts, in commercial bank money, including in tokenized form, or with e-money tokens (Article 5(8)). ESMA's list of authorized infrastructures (checked on October 13, 2026) shows a single DLT SS, CSD Prague's, authorized since October 11, 2024 with an exemption from CSDR Article 40, and four DLT TSS, which combine trading and settlement. The differences are explained in DLT-MTF, DLT-SS and DLT-TSS.

Pontes: central bank money for DvP on DLT. On July 1, 2025 the ECB announced a two-track strategy for settling DLT-based transactions in central bank money: Pontes, for the short term, and Appia, for the long term. Before that, between May and November 2024, the Eurosystem ran more than 50 trials and experiments with 64 participants. The Eurosystem launched Pontes on September 21, 2026. It links market DLT platforms with TARGET Services: cash settles with tokens on the Eurosystem DLT platform or in T2, the real-time gross settlement system, and the cash leg is final once it completes in T2. DvP across platforms runs on the Hash-Link protocol. Eligible operators include central securities depositories authorized under the CSDR and operators of DLT SS and DLT TSS under the pilot regime, among others. At launch, the initial group included 13 market participants (among them ABANCA, Cecabank and Santander), plus the Deutsche Bundesbank, and four DLT operators: Axiology, Cashlink, Clearstream and SWIAT. The ECB plans to add features and longer hours step by step, with full implementation expected by 2028.

The cash leg. It can be central bank money (in the euro area, through Pontes for wholesale transactions), a commercial bank tokenized deposit or an e-money token regulated by MiCA. The pilot regime gives priority to central bank money where practical (Article 5(8)). A CBDC is central bank money in digital form.

What it means for an issuer. How a deal settles is decided when the issuance is structured: which ledger will hold the security, which money will pay for it and who guarantees finality. A tokenized security paid off-chain with an ordinary bank transfer does not have DvP by itself: it needs a mechanism that blocks the security until the payment is confirmed, as the PFMI describe (paragraph 3.12.4).

Official sources: Regulation (EU) No 909/2014 (CSDR), Arts. 2(1)(27), 5(2), 39(7) and 40; Regulation (EU) 2025/2075 (T+1); Regulation (EU) 2022/858, Arts. 2(7), 5, 9 and 19; CPSS, Delivery versus payment in securities settlement systems (1992); CPSS-IOSCO, PFMI (2012); ESMA, authorized DLT market infrastructures; ECB press release, September 21, 2026; ECB, Pontes page.

Framework verified as of October 13, 2026. At Unknown Gravity we build the platform, smart contracts and integrations with DLT infrastructures and with the payment asset, working alongside the client's legal counsel. We are not a central securities depository, an ERIR or a CASP: those roles belong to authorized entities. Talk to us.