This chapter takes one of the most overused phrases in tokenisation marketing, "atomic settlement", and makes it precise. The audience already knows how an atomic swap works on a public chain and how an automated market maker (AMM) routes liquidity. What is less obvious is how the regulated delivery-versus-payment (DvP) framework that has governed institutional securities settlement since the 1990s maps onto an on-chain programme, and where the cryptographic atomicity story breaks on contact with the cash leg of most real-world trades. Part 1 sets the CPMI-IOSCO model taxonomy, separates atomic from final, and pins the definitions the rest of the chapter is built on.
Definition
Delivery-versus-payment, in the CPMI-IOSCO sense, is a securities settlement mechanism that links the transfer of securities to the transfer of cash in such a way that one delivery occurs if and only if the corresponding payment occurs. The phrase appeared in BIS work in the early 1990s after a series of failed-trade incidents at major central securities depositaries (CSDs), and it has been canonical settlement vocabulary ever since. The 2024 BIS CPMI tokenisation taxonomy reconfirms the framing for tokenised contexts and is the working reference for any tokenisation programme that needs to map its design onto regulator-recognised vocabulary.
CPMI defines three DvP models, useful precisely because they allocate the cost of a failed trade differently.
Model 1 is gross simultaneous settlement of both legs. Each trade settles individually, both legs at once, in central bank money or equivalent. If either leg fails, the trade is undone. This is the gold standard for systemic-risk reduction because no participant ever has unsettled exposure. It is also the most demanding on liquidity, because every trade consumes cash and securities at gross volumes.
Model 2 is gross securities settlement with net cash settlement. Securities legs settle finally throughout the day; cash legs net at one or more end-of-day cycles. Daytime exposure is one-directional: securities have moved, cash is owed. This is how many CSD-correspondent-bank arrangements have historically operated.
Model 3 is net-net: both legs settle on a netted basis at defined cycles. Pre-settlement exposures build on both sides; the system relies on a central counterparty (CCP) or a settlement bank to absorb a failure. Most liquidity-efficient, largest residual settlement risk if the central cycle fails.
The reason these models matter for a tokenisation programme is that atomic on-chain DvP, in its purest form, is a Model 1 construct. Any tokenisation team selling "atomic DvP" to a market that previously ran on Model 3 needs to be honest about the liquidity implications. Atomicity removes settlement risk; it does not remove the demand for funding the gross legs. If the trading desk was previously sized for net obligations, it is now sized for gross, and the funding cost shows up immediately.
Atomic versus final
The "atomic" qualifier adds one specific property on top of the DvP definition: the link between the two legs is a single indivisible operation, with no observable interval in which one leg has completed and the other has not. In a CSD-correspondent-bank arrangement, "DvP" is a procedural promise enforced by sequencing rules, batch windows, and reconciliation breaks. In an atomic arrangement, it is a property of the data structure, enforced by the ledger.
What atomicity does not add is settlement finality. A trade that is atomic in the cryptographic sense can still be unwound by an insolvency court if the system is not designated under the relevant finality regime, if the parties did not agree in advance to treat the chain entry as final, or if the underlying property characterisation of the on-chain record is contested. Atomicity is a useful operational property, not a substitute for the legal plumbing covered in Tokenisation, defined. The two concepts are independent. You can have one without the other, and both production systems and pilot designs run in every quadrant.
The clean way to read the pair: atomicity is a property of the chain, finality is a property of the legal regime, and DvP is a property of the workflow that links the two legs of a trade. An institution-grade atomic DvP arrangement needs all three working together. Selling one as a substitute for the others is the analytical error that costs a counterparty time during onboarding.
A worked example helps. A Uniswap-style atomic swap between two arbitrary tokens on Ethereum is atomic. Whether it is "DvP" in the regulated sense depends on what the tokens legally represent. Whether it has settlement finality depends on whether the venue is a designated settlement system under a national regime. For most public-chain swaps, the answer to the second question is no, regardless of how clean the cryptography is. The closest production contrasts are Project Ensemble's tiered DvP between tokenised assets and tokenised central bank money, and the Tokenized Collateral Network on Kinexys, where atomic asset-and-cash settlement runs against a designated rule book rather than a public-chain swap pool.
Part 2 picks up the mechanics: same-ledger atomicity, where both legs sit on the same chain, and cross-ledger atomicity, where they do not, with the three solution families (hash time-locked contracts, the coordinator pattern, and the unified settlement layer) that operators actually meet in production.