Blockchain and Distributed Ledger Technology (DLT) in Wholesale Payments

Banking, Insurance and Financial Services November 30, 2025
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Introduction

Distributed Ledger Technology (DLT), commonly known as Blockchain, holds transformative potential for wholesale payment systems and securities settlement, promising to reduce counterparty risk, increase transparency, and enhance operational efficiency. This course provides a comprehensive analysis of how DLT can be applied in the high-value, high-security environment of interbank and cross-border payments. Participants will gain a technical understanding of consensus mechanisms, smart contracts, and tokenization, and critically evaluate the various wholesale CBDC and tokenized commercial bank money models. The program focuses on assessing the feasibility, risks, and regulatory challenges of DLT adoption, contrasting its features with established infrastructure like RTGS and Swift, and guiding central bank and commercial bank strategists on navigating this evolving landscape.

Objectives

Upon completion of this course, participants will be able to:

  • Explain the core technical components of **Distributed Ledger Technology (DLT)**: consensus, cryptography, and smart contracts.
  • Analyze and compare the various models for DLT in wholesale payments (e.g., wholesale CBDC, tokenized commercial bank money).
  • Evaluate the potential of DLT to enhance **delivery-versus-payment (DvP)** and **payment-versus-payment (PvP)** settlement.
  • Assess the legal, governance, and operational risks (e.g., finality, scalability) of DLT-based payment systems.
  • Understand the regulatory and policy challenges related to DLT interoperability and cross-border use.
  • Compare the operational efficiency, speed, and resilience of DLT against existing RTGS infrastructure.
  • Examine the role of smart contracts in automating compliance, collateral, and payment execution.
  • Develop a strategic framework for evaluating DLT adoption projects within their institution.

Target Audience

  • Heads of Payments Systems, Innovation, and Strategy at Central Banks and Commercial Banks.
  • FinTech and Technology Policy Specialists.
  • Operations and Settlement Managers in Wholesale Markets.
  • IT Architects and DLT Development Teams.
  • Risk Management and Compliance Officers focused on Digital Assets.
  • Legal and Regulatory Staff dealing with Digital Finance.

Methodology

  • Interactive Workshops on Smart Contract Logic and Use Cases
  • Case Studies on Global DLT Pilot Projects (e.g., Project Jasper, Fnality)
  • Group Activities on Designing a Governance Model for a DLT Consortium
  • Expert-Led Debates on the Feasibility of Wholesale CBDC on DLT
  • Technical Demonstrations of DLT Platforms (e.g., Hyperledger Fabric, Corda)
  • Individual Assignments on Cost-Benefit Analysis for DLT Adoption

Personal Impact

  • Acquisition of deep, technical understanding of DLT and its practical application in high-value finance.
  • Enhanced ability to lead digital transformation and innovation projects in payment systems.
  • Improved strategic input on the future architecture of national and cross-border payments.
  • Development of skills to critically assess DLT vendor claims and technological risks.
  • Increased professional credibility as a bridge between financial policy and cutting-edge technology.
  • Better decision-making on the adoption of wholesale CBDC and tokenization.

Organizational Impact

  • Potential for significant long-term reduction in counterparty and settlement risk in wholesale markets.
  • Identification and execution of opportunities to enhance the efficiency of payment and securities settlement.
  • Modernization of the organization's core financial market infrastructure and technology stack.
  • Proactive positioning to manage the regulatory and policy implications of digital money.
  • Improved cross-border payment efficiency and reduced compliance costs.
  • Strengthened organizational capacity to evaluate and manage DLT operational risks.

Course Outline

Unit 1: DLT Fundamentals and Applications in Finance

Technology Mechanics:
  • Conceptual understanding of Blockchain, permissioned vs. permissionless ledgers, and consensus mechanisms.
  • The concept of **tokenization** of traditional assets (money, securities).
  • The role of **Smart Contracts** in automating settlement and compliance procedures.
  • Comparison of DLT with traditional centralized database technology.
  • Case studies of active DLT pilot projects in wholesale finance (e.g., Project Ubin, Fnality).

Unit 2: DLT for Wholesale Payments and Settlement

Efficiency and Risk Reduction:
  • Models for central bank money on DLT: wholesale CBDC vs. access to a centralized ledger.
  • Using DLT to achieve simultaneous **Delivery-versus-Payment (DvP)** and **Payment-versus-Payment (PvP)**.
  • Analysis of DLT's potential to replace or complement traditional **Correspondent Banking**.
  • Reducing counterparty and settlement risk through atomic settlement.
  • The challenge of liquidity provisioning and management on a DLT platform.

Unit 3: Risks, Governance, and Scalability

Oversight Challenges:
  • Legal finality of settlement on a DLT and the enforceability of smart contracts.
  • Cybersecurity risks and the unique vulnerability of distributed network topology.
  • **Scalability** and throughput limitations of current DLT systems vs. high-volume payment demands.
  • Governance models for a DLT consortium: membership, rule changes, and dispute resolution.
  • The policy debate on central bank versus private sector DLT initiatives.

Unit 4: Cross-Border DLT Solutions

International Interoperability:
  • Challenges and opportunities for DLT in cross-border payments and remittances.
  • Models for interoperability: connecting multiple domestic DLTs, common platform, or bridges.
  • The role of international bodies (BIS, G7) in setting standards for DLT in payments.
  • Regulatory hurdles related to cross-border data transfer and data sovereignty.
  • Implications of global stablecoins and private crypto for DLT payment development.

Unit 5: Strategic Planning and Implementation

Roadmap for Adoption:
  • Developing a strategic evaluation framework for DLT Proof-of-Concepts (PoCs).
  • Cost-benefit analysis of DLT migration vs. upgrading existing infrastructure.
  • Skills and resources required to build and operate a DLT-based FMI.
  • Integration of DLT with existing core banking and securities systems.
  • The role of the central bank as an operator, catalyst, or regulator of DLT systems.

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