# #14: The Consequences of Atomic Settlement

**16 Nov**  
Written By [Saiesha Pitroda](/content/all-fna-broadcasts?author=6825c3024b109a092cd591c8/index.html)

**6th December 2023**

**With:**

| Dirk Bullmann (CLS)  
* * *  
In Session #14, Dirk Bullmann explores the practical realities behind the "atomic" hype. The term—derived from the Greek _atomos_ (indivisible)—describes a transaction that either succeeds completely or fails entirely across multiple ledgers. While this "all-or-nothing" certainty is the "holy grail" for eliminating principal risk, Dirk warns that moving to a pure T+0, real-time gross settlement (RTGS) model could inadvertently create a **Liquidity Trap**.

The discussion introduces the concept of **Molecular Settlement**, a framework proposed in FNA’s research to solve the liquidity-speed paradox. By using an intermediate layer to "bundle" atomic transactions into logical sets (molecules), financial market infrastructures (FMIs) can achieve the risk-mitigation benefits of atomicity without sacrificing the massive capital efficiencies provided by traditional multilateral netting.

**Key Discussion Points:**

- **Defining Atomicity:** Moving beyond buzzwords to define atomic settlement as the technical synchronization of assets (DvP/PvP) rather than just "fast" payments.

- **The Liquidity Trap:** Why instant settlement requires 100% pre-funding, potentially draining billions in capital from the global financial system.

- **Molecular Settlement:** A deep dive into FNA’s proposal for an intermediate layer that uses smart algorithms to net atomic transactions before final settlement.

- **The Netting Efficiency Loss:** Quantifying the "cost of speed" and why traditional T+2 cycles are often a deliberate choice for capital optimization.

- **Interoperability & Governance:** Why "Atomic" doesn't mean "Interoperable"—addressing the legal and jurisdictional hurdles of linking disparate ledgers.

- **The Future of Wholesale FX:** How CLS envisions evolving its $7 trillion-a-day system to support faster cycles without breaking the netting model.

**Watch on Demand:**

Listen on: [Spotify](https://open.spotify.com/episode/3OmCxIvuKUqvdVHaSGk8i0?si=4y_L3x3uQfSnH4qLQaD4Jw) | [Apple Podcasts](https://podcasts.apple.com/gb/podcast/payment-systems-broadcast-14-the-consequences-of/id1772649634?i=1000675317013) | [Amazon Music](https://music.amazon.co.uk/podcasts/93293cc8-fa9c-41a8-a3d7-86b413d78941/episodes/322466a8-0a66-444c-8ca2-800055cccce2/fna-broadcasts-payment-systems-broadcast-14---the-consequences-of-atomic-settlement)