Glossary · Settlement
Delivery Versus Payment (DvP)
Also: DvP, delivery-versus-payment, payment versus payment
Published
Delivery Versus Payment (DvP) — Delivery versus payment (DvP) is a settlement arrangement in which the transfer of an asset happens only if the corresponding payment happens, and vice versa, so that neither party is exposed to the loss of principal if the other fails to deliver. In digital assets it is implemented through escrow, atomic on-chain transfers, or a settlement agent.
The Principle
DvP is borrowed from securities settlement, where central securities depositories make the delivery of securities and the payment of cash conditional on each other. The goal is to eliminate principal risk: the possibility that one side pays and receives nothing. The same principle applies wherever two legs of a trade move on separate rails.
Implementations in Digital Assets
When both legs are on-chain, for example an asset against a stablecoin, an atomic swap or a settlement contract can make the two transfers succeed or fail together. When one leg is fiat, a settlement agent or a bilateral procedure sequences the legs closely: the asset moves to a controlled account, the payment is confirmed, and the asset is released. Institutional settlement networks that operate in stablecoins can approximate DvP around the clock; fiat rails constrain it to banking hours.
What DvP Does Not Cover
DvP removes principal risk, not replacement cost risk: if a counterparty fails before settlement, the trade must be replaced at the current market price. Netting and documented terms address that residual exposure.