# Delivery versus Payment (DvP)

> Delivery versus Payment (DvP) is a settlement method that makes an asset transfer conditional on the corresponding payment, reducing the risk that either party completes only its side of a transaction.

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- Categories: Glossary
- Created: 2026-11-10T14:22:32.733Z
- Last updated: 2026-11-10T14:22:32.733Z
- Source: IQ.wiki — the world's largest blockchain and crypto encyclopedia (https://iq.wiki)

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**Delivery versus payment (DvP)** is a settlement method in which the transfer of an asset is conditional on the corresponding payment: both legs complete together, or neither does. In a securities sale, the buyer receives the security if and only if the seller receives payment. This arrangement is intended to reduce the risk that one party delivers without receiving the other party’s side of the transaction.[\[1\]](#cite-id-epu4hw3o75)​[\[2\]](#cite-id-jha06xw1fh)​[\[3\]](#cite-id-0ykhwr9lan)​

DvP is used in securities settlement and can also coordinate exchanges involving other assets, including commodities, derivatives, and tokenized assets. In [blockchain](https://iq.wiki/wiki/blockchain) implementations, [smart contracts](https://iq.wiki/wiki/smart-contract) can hold or coordinate the asset and payment commitments and release them together. DvP may operate on one blockchain, across multiple blockchains, or between onchain and traditional systems.[\[2\]](#cite-id-jha06xw1fh)​[\[4\]](#cite-id-x0fw9bjhx2)​



## Purpose & Settlement Risk

The principal risk addressed by DvP is that one party completes its part of a transaction while the counterparty fails to complete the other. In a securities transaction, this can mean that securities are delivered without payment, or that payment is made without the securities arriving. DvP links the two transfers so that delivery is not completed independently of payment, reducing counterparties’ exposure to this principal settlement risk.[\[1\]](#cite-id-epu4hw3o75)​[\[2\]](#cite-id-jha06xw1fh)​

Traditional securities settlement often involves separate systems for assets and payments, as well as intermediaries. Settlement may take up to two business days after a trade, a convention known as T+2, and some systems operate only during business hours. The delay leaves time for a counterparty to default after the other side has performed. Clearinghouses, custodians, and central securities depositories help manage this risk, but can add operational steps, costs, and delays.[\[1\]](#cite-id-epu4hw3o75)​[\[2\]](#cite-id-jha06xw1fh)​[\[4\]](#cite-id-x0fw9bjhx2)​

The development of DvP requirements followed restrictions on institutions paying for securities before the securities were held in negotiable form. After the worldwide equity-price drop in October 1987, central banks in the Group of Ten strengthened settlement procedures to address the risk of securities being delivered without payment. In conventional operations, a negotiable-securities sale can be instructed to a settlement agent using SWIFT Message Type MT 543 under the ISO 15022 standard; standardized messages support automated processing and are intended to reduce settlement risk.[\[1\]](#cite-id-epu4hw3o75)​



## DvP on Blockchains

When both an asset and its payment are represented on a distributed ledger, a [smart contract](https://iq.wiki/wiki/smart-contract) can register the commitments and execute them atomically. In a single-chain arrangement, the contract can transfer both legs in one operation; whether the assets are locked in advance depends on the design and the guarantees sought. A completed transaction also creates a shared ledger record that parties can verify.[\[2\]](#cite-id-jha06xw1fh)​[\[3\]](#cite-id-0ykhwr9lan)​

​[Blockchain](https://iq.wiki/wiki/blockchain) settlement can shorten the interval between trade and settlement. [Chainlink](https://iq.wiki/wiki/chainlink)’s educational article characterizes onchain DvP as enabling T+0 settlement, with finality in seconds or minutes rather than days; the [Solana](https://iq.wiki/wiki/solana) guide describes its example settlement as sub-second. These are implementation-specific descriptions, rather than a single settlement speed for all DvP systems.[\[4\]](#cite-id-x0fw9bjhx2)​[\[3\]](#cite-id-0ykhwr9lan)​

### Cross-Chain Settlement

Cross-chain DvP coordinates transactions whose asset and payment legs are on different [blockchains](https://iq.wiki/wiki/blockchain). In a typical workflow, the seller locks the asset in a contract on one chain and the buyer locks funds in a contract on another. An interoperability layer links the contracts and monitors both chains. After verifying that the payment is locked and valid, the system releases the asset to the buyer and the funds to the seller. If verification fails—for example, because the buyer lacks sufficient funds or a time limit expires—the assets return to their original owners.[\[4\]](#cite-id-x0fw9bjhx2)​

Cross-chain settlement cannot necessarily execute as one instantaneous operation: the systems must coordinate state across separate networks. One approach described for multi-chain arrangements uses a hash lock. A participant chooses a secret and publishes its hash as part of the settlement conditions; disclosure of the secret to claim one leg allows the other participant to claim the corresponding leg. Time locks can cause an unfulfilled settlement to expire. Implementations may also use an orchestration layer to coordinate actions and define when a commitment can no longer be cancelled or reversed.[\[2\]](#cite-id-jha06xw1fh)​[\[4\]](#cite-id-x0fw9bjhx2)​

​[Chainlink](https://iq.wiki/wiki/chainlink) presents its Cross-Chain Interoperability Protocol (CCIP) as infrastructure for transmitting data and tokens between chains and connecting the delivery and payment legs. The company describes CCIP as having “Level-5 security” and being backed by its Risk Management Network. Chainlink also presents its Runtime Environment (CRE) as an orchestration layer that can coordinate CCIP messages with data verification and compliance workflows, including checks through its Automated Compliance Engine (ACE).[\[4\]](#cite-id-x0fw9bjhx2)​

### Hybrid & Offchain Settlement

DvP can span onchain systems, legacy systems, and physical delivery. For example, a digital payment may be released after a recipient provides evidence or signs off that a physical asset has been delivered. Such arrangements can rely on existing legal frameworks and may require rules for cancellation, expiration, and dispute resolution. In sensitive or regulated contexts, a third party may hold assets in escrow or act as a notary, validating settlement and, in some designs, cancelling or reversing a transaction that fails to execute.[\[2\]](#cite-id-jha06xw1fh)​

A transaction spanning multiple systems may involve different rules for trust, cancellation, and finality. A DvP design therefore aims to ensure that all commitments are fulfilled or rejected together, even when execution in one domain must wait for another. Developers must identify points at which steps become locked against cancellation or reversal before proceeding.[\[2\]](#cite-id-jha06xw1fh)​



## Related Settlement Methods

Payment versus payment (PvP) conditions the transfer of funds in one currency on the simultaneous transfer of funds in another currency. [Delivery versus delivery (DvD)](https://iq.wiki/wiki/delivery-versus-delivery-dvd) makes delivery of one asset conditional on delivery of another, such as a tokenized bond exchanged for a different tokenized bond. Cross-chain foreign-exchange swaps are described as a potential PvP application. Like DvP, both methods depend on coordinating the transaction legs so that they complete together or not at all.[\[4\]](#cite-id-x0fw9bjhx2)​[\[2\]](#cite-id-jha06xw1fh)​

Free of payment (FOP) is a contrasting securities transaction in which securities are delivered or received without payment at that time. Unlike DvP, FOP does not make delivery conditional on payment and therefore carries settlement risk. DvP is described from the buyer’s perspective; receive versus payment (RVP) is the corresponding term from the seller’s perspective. Other names for DvP include delivery against payment (DAP), delivery against cash (DAC), and cash on delivery.[\[1\]](#cite-id-epu4hw3o75)​



## Applications and Implementations

DvP can be used to exchange securities, such as bonds, for cash represented by a [stablecoin](https://iq.wiki/wiki/stablecoin) or central bank digital currency. Its cross-chain form can also connect assets and funds held in otherwise separate networks—for example, a token issued on a private bank chain with an investor’s funds on a public [blockchain](https://iq.wiki/wiki/blockchain).[\[4\]](#cite-id-x0fw9bjhx2)​

A [Solana](https://iq.wiki/wiki/solana) educational reference implementation demonstrates a bond sale using Token-2022 bond tokens and [USDC](https://iq.wiki/wiki/usdc). In its example, an investor pays US$95,000 in USDC for 100 bonds, or US$950 per bond. One design gives a settlement agent delegated authority over the issuer’s and investor’s token accounts so it can submit both transfer instructions in one transaction. Another uses program-owned escrow, with each party funding its leg through a token transfer. The guide states that the bundled transfers either both succeed or both fail.[\[3\]](#cite-id-0ykhwr9lan)​

The guide’s example uses Token-2022 extensions to support securities controls. The Default Account State extension makes new bond-token accounts frozen until explicitly whitelisted; whitelisting creates and thaws an account, while removing a participant from the whitelist freezes it. The Metadata extension can store bond information such as an international securities identification number (ISIN), maturity date, and coupon rate. The example assigns minting to the issuer and freezing and metadata updates to the settlement agent; a Permanent Delegate is identified as an optional extension for regulatory recovery or clawback.[\[3\]](#cite-id-0ykhwr9lan)​

The same guide demonstrates bundling multiple transfers into one transaction for a three-party exchange. It also describes limits that affect larger settlements: transactions are constrained by size and account limits, and larger transfers may require Address Lookup Tables or a different transaction format. The guide presents the implementation as educational rather than production-ready, and calls for security audits, custody and key-management controls, legal and regulatory review, compliance systems, testing, and operational procedures for failures, monitoring, and reconciliation.[\[3\]](#cite-id-0ykhwr9lan)​

Reported institutional applications include a Swift demonstration of interoperability between its network and public and private blockchains using CCIP to facilitate tokenized-value transfers. [Chainlink](https://iq.wiki/wiki/chainlink) also reports that Kinexys by J.P. Morgan and [Ondo Finance](https://iq.wiki/wiki/ondo-finance) used CRE to complete an atomic cross-chain DvP transaction involving tokenized treasury funds.[\[4\]](#cite-id-x0fw9bjhx2)​

In decentralized finance, cross-chain decentralized exchanges can use DvP logic to swap tokens across networks without a centralized exchange. Chainlink gives exchanges such as ETH for SOL or AVAX as examples.[\[4\]](#cite-id-x0fw9bjhx2)​



## Benefits and Considerations

DvP can reduce principal settlement risk, limit the need to hold [collateral](https://iq.wiki/wiki/collateral) against settlement failures, and reduce manual reconciliation and follow-up on failed trades. Blockchain-based settlement may also improve capital utilization and liquidity by making funds available sooner, while cross-chain systems can connect liquidity held on separate networks. A shared ledger can provide a settlement record that parties can verify and may support regulatory oversight.[\[1\]](#cite-id-epu4hw3o75)​[\[2\]](#cite-id-jha06xw1fh)​[\[4\]](#cite-id-x0fw9bjhx2)​

These benefits depend on the settlement design and the systems involved. Cross-chain and hybrid arrangements must coordinate different execution rules, time limits, cancellation rights, and trust assumptions. An atomic outcome requires not only linking the asset and payment legs, but also defining how the system handles a failed or delayed step in each domain.[\[2\]](#cite-id-jha06xw1fh)​[\[4\]](#cite-id-x0fw9bjhx2)​