Non-bank payment systems’ access to GCUL can significantly reduce settlement risk through several mechanisms:
- Atomic settlement: GCUL supports atomic settlement, meaning assets and payments are exchanged instantly and irreversibly in a single transaction. This eliminates the risk of one party delivering payment while the other fails to deliver the asset, a major source of settlement risk in traditional systems.
- 24/7 settlement and tokenization: GCUL enables continuous, around-the-clock settlement of tokenized assets and payments. This reduces delays typical in multi-day settlement cycles that require collateral and working capital, which escalate settlement risk.
- Permissioned, KYC-compliant network: By restricting network participants to verified, compliant entities with real-time regulatory checks (e.g., KYC/AML), GCUL reduces counterparty risk and the likelihood of fraud or sanctions violations.
- Vendor-neutral infrastructure: GCUL provides a shared, neutral platform where competing financial and payment institutions can transact with equal access, reducing friction and operational risk stemming from fragmented or siloed payment networks.
- Lower collateral and capital costs: Early pilots with CME Group indicate GCUL can reduce collateral settlement costs by about 30%, freeing up capital and reducing liquidity risk for participants.
In summary, enabling non-bank payment systems to access GCUL’s compliant, atomic settlement-enabled network helps mitigate settlement risk by making payments final and secure, streamlining processes, and ensuring regulatory transparency.