Solana Foundation unveils a program to settle institutional trades in seconds. JPMorgan gave input

Solana Foundation unveils a program to settle institutional trades in seconds. JPMorgan gave input

Solana Foundation launched an open-source program that lets institutions settle trades in seconds, not days. JPMorgan provided key inputs.

The Solana Foundation introduced Solana DvP, an open-source program that settles asset and payment transfers together on-chain within seconds, reducing counterparty risk. The externally audited standard aims to replace institutions’ custom settlement contracts and support the growth of tokenized assets across Solana. JPMorgan contributed settlement expertise to the project, while the foundation plans to add privacy features sought by institutional market participants.

Solana Foundation, a non-profit dedicated to the decentralization, growth, and security of smart contract blockchain Solana, is taking a big swing at one of traditional finance’s old headaches – settlement risk.

On Oct. 6, the Foundation unveiled Solana DvP, an open-source delivery-versus-payment program that lets institutions settle trades “atomically on-chain,” with finality in seconds instead of days.

In traditional markets, assets and cash move through a chain of clearinghouses and custodians over one to two days, tying up capital and leaving room for principal risk. Solana DvP compresses these multiple legs into a single atomic transaction, such that both legs settle together, or neither does.

In plain English, institutions no longer have to trust the counterparty to deliver later. The trade either completes in full instantly, or it doesn’t happen at all, eliminating the risk of one party defaulting after receiving the asset or the cash as a part of the trade.

The DvP program also replaces the patchwork that institutions currently face when settling trades on-chain, where they’ve had to commission custom, one-off smart contracts for each deal.

“Atomic settlement removes counterparty risk that is inherent in traditional finance. Solana DvP program provides institutions with one open standard across the Solana ecosystem, on public infrastructure, with finality in seconds instead of days,” Catherine Gu, head of product, Digital Assets, Solana Foundation, said in a press release shared with CoinDesk.

Faster, safer settlement lowers the friction cost of moving value on-chain, which is precisely what tokenized assets need to scale.

Solana is already involved in notable tokenization experiments involving institutions, including a J.P. Morgan–arranged commercial paper deal for Galaxy Digital settled in USDC. An open, audited DvP standard could turn those one-off deals into regular business.

The latest effort has inputs from JPMorgan, too. The investment bank fed the project with decades of settlement-related information, helping shape requirements around deadlines, escrow isolation, and the token extensions regulated issuers rely on, such as pausable tokens and transfer hooks under Solana’s upgraded token standard, Token-2022.

Pausable tokens are crypto token featuring an emergency-stop mechanism so that the administrator can freeze transfers when required.

“A shared, open standard for atomic delivery-versus-payment is exactly the kind of foundational infrastructure institutional market participants require to operate at scale without introducing settlement risk and counterparty exposure. We were pleased to contribute our settlement expertise,” Rhodel D'souza, head of markets digital assets at J.P. Morgan, said.

Newsletters

Solana’s DvP may not be the first of its kind, but it stands out as an open standard on public infrastructure. JPMorgan’s Kinexys has successfully tested a cross-chain DvP trade with Ondo Finance, bridging its permissioned payments infrastructure with the public Ondo Chain testnet. Similarly, ClearToken launched DvP settlement using its native, fully permissioned and regulated applications running on top of the decentralized, privacy-enabled Canton Network.

The foundation says the DVP program has passed external security audits and is ready for real funds, with privacy features planned so settlements can stay confidential.

At Consensus Hong Kong in February this year, institutions emphasized that robust privacy features are key to mass adoption of blockchain technology by institutional players.

1U.S. scraps proposed $10,000 reporting rule for for crypto sent to private wallets14 minutes ago 2Ethereum’s Glamsterdam test gets last-minute fix before major capacity jump21 minutes ago 3Bitcoin keeps getting rejected at $87,000 as stocks hover near records28 minutes ago 4Crypto's campaign arm, Fairshake, sets lists of U.S. House favorites it'll spend on9 hours ago 5More than 60 U.S. stocks including Nvidia and Tesla are headed onchain. Here’s how it works11 hours ago 6U.S. CFTC joins SEC in proposing crypto regulations, though spot-market gap lingers13 hours ago 7Stripe to expand stablecoin cards to over 100 countries by the end of the year15 hours ago 8An XRP treasury SPAC surges nearly 300% ahead of Evernorth merger16 hours ago 9SEC approves a 3x fix for bitcoin and ether traders who miss the wild swings17 hours ago 10Treasury crackdown exposes crypto's role in $2 million Hamas fundraising network18 hours ago

The Definitive Stablecoin Landscape Series: Asia Pacific

The Definitive Stablecoin Landscape Series: Asia Pacific

As stablecoins move into regulated finance, APAC is becoming a key proving ground. This report maps the region’s rules, use cases, and RLUSD’s role.

As stablecoins move into regulated finance, APAC is becoming a key proving ground. This report maps the region’s rules, use cases, and RLUSD’s role.

Why it matters:

As stablecoins move into regulated finance, APAC is becoming a key proving ground. This report maps the region’s rules, use cases, and RLUSD’s role.

Bitcoin keeps getting rejected at $87,000 as stocks hover near records

More than 60 U.S. stocks including Nvidia and Tesla are headed onchain. Here’s how it works

An XRP treasury SPAC surges nearly 300% ahead of Evernorth merger