Crypto glossary
Delivery versus payment (DvP)
Delivery versus payment (DvP) is the settlement rule that a security is delivered only if the matching payment is made, so neither side is left exposed.
DvP is a long-standing principle of securities markets, set out in international standards for market infrastructure. Central securities depositories and payment systems are linked so that the transfer of a bond or share and the transfer of cash are conditional on each other. Without it, a buyer could pay and never receive the asset, or a seller could deliver and never be paid.
Tokenisation projects are built around achieving DvP on distributed ledgers. When both legs exist on-chain, a smart contract can enforce it atomically; when the asset is on-chain but the cash is not, systems need bridges to central bank payment systems. The Eurosystem's trials of DLT settlement in central bank money and the EU DLT Pilot Regime both focus on this problem.
Variants matter. Some DvP models settle each trade gross and immediately, others net many trades at the end of a cycle. Cross-chain DvP, where the asset and the cash sit on different networks, still relies on bridges or coordinating operators, which reintroduces some of the risks the principle is meant to remove.
Example
In a pilot, a bank buys a tokenised bond on a DLT platform, and the bond moves to its account only after the platform confirms the payment in central bank money has been executed.