| Activity | Description |
|---|---|
| Settlement transaction processing | • Refers to the settlement of the delivery leg and the payment leg of a transaction; • Responsibility of the Registrar, the Settlement Agent, and counterparties involved in the payment leg. |
| Fail & claim Management | • Refers to the management of settlement transaction fails and claims; • Responsibility of both the Registrar and the Settlement Agent. |
After having processed the settlement instructions, the Registrar initiates the settlement transaction process.
This phase is strongly impacted by the underlying technologies used in both the delivery leg (Security Tokens) and the payment leg (cash). While only DLTs can be used for the delivery leg of the Security Token transaction, the payment leg can use either traditional payment systems (e.g. central bank money in Target2) or DLTs or a Target 2 system interoperable with the DLT used as the underlying technology for the cash settlement.
In the event a DLT is used for the cash leg of the transaction, and subject to internal/external regulatory analysis, four types of funds/tokens could potentially be transferred:
- CBDC (Central Bank Digital Currency);
- Asset-referenced tokens, such as stablecoins based on a basket of fiat currencies;
- E-money tokens, such as stablecoins on a 1-to-1 basis with fiat currency;
- Other kinds of Settlement tokens.
There are three types of settlement technological configuration:
| Settlement technological configuration | Delivery leg | Payment leg |
|---|---|---|
| Cross-chain | Chain X | Chain Y |
| Mono-chain | Chain X | Chain X |
| Hybrid | Chain X | Current payment system |