Building block 9: Facilitating increased adoption of PvP

Cross-border payments typically involve two or more currencies, resulting in foreign exchange (FX) settlement risk. Payment versus payment (PvP) mechanisms can mitigate this risk. However, the proportion of FX trades not settled on a PvP basis has increased in recent years, potentially exposing FX market participants to substantial FX settlement risk.


Expanding the availability of PvP to a wider range of currencies so that market participants can mitigate FX settlement risk and, where PvP mechanisms employ netting, reduce liquidity requirements. This can ultimately reduce the costs of cross-border payments.


  • In December 2020, the BCBS and CPMI Chairs issued a joint letter encouraging the observance of the expectations agreed in the 2013 BCBS Supervisory Guidance on managing FX settlement risk.
  • In August 2021, the CPMI and BCBS held a workshop on FX settlement risk, updating supervisors on recent developments and focusing on the use of FMIs that provide PvP protection.
  • Additional measures include (1) the launch of an online tutorial for supervisors;
    (2) engagement with industry through the  Global Foreign Exchange Committee (GFXC), which has resulted in strengthening the settlement risk aspects of the Global FX Code; and (3) an agreement to collect further data on FX settlement risk through the next BIS Triennial Central Bank Survey of FX and over-the-counter (OTC) derivatives markets in 2022.
  • Over the course of 2021 and the first half of 2022, the CPMI engaged with industry through a survey of existing PvP arrangements and a call for ideas on new proposals for PvP settlement. This yielded responses from a range of interested parties, including existing infrastructures, global banks, new entrants and industry groups.
  • In July 2022, based on an analysis of the input from industry, the CPMI published a consultative report on proposals for increased adoption of PvP and connected with industry again through two workshops held in September 2022.