Atomic settlement
A settlement method in which both legs of a trade, such as asset and payment, complete together in one indivisible transaction or not at all.
Also called: Delivery versus payment (DvP)
Atomic settlement means a transaction either fully executes or fully fails. In a trade, the transfer of the asset and the transfer of cash are bundled so neither party can deliver without receiving, removing principal risk between counterparties.
On a blockchain this is achieved by a smart contract or ledger protocol that moves both tokens in the same state change. It is a technical form of delivery versus payment and can happen instantly, unlike traditional markets where trades settle days or at least one business day after execution.
For markets, atomic settlement can shrink counterparty and settlement risk, reduce collateral tied up during settlement and enable around the clock trading. It also requires cash and assets to be pre-funded on the same ledger, which changes liquidity management. Example: swapping a tokenized Treasury for a stablecoin on a single chain settles atomically, with no window in which one side is exposed.
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Part of the BlockWest Glossary, plain-language definitions for markets, AI and digital assets. Educational content, not investment advice.