Real Time Gross Settlement

Real Time Gross Settlement is a specialized payment system mechanism where the transfer of money or securities takes place from one bank to another on a real time and on a gross basis. Real time means the processing of instructions occurs at the time they are received rather than at the end of a day.

Gross settlement means the settlement of funds transfer instructions occurs individually on an instruction by instruction basis. This system is critical in financial markets to eliminate settlement risk because the transaction is final and irrevocable once processed.

In the context of high value digital asset transfers or interbank settlements, it ensures that liquidity is not tied up in netting queues. It acts as the backbone for modern financial infrastructure by providing immediate finality.

Without this mechanism, systemic risk would increase significantly due to the time lag between trade execution and settlement. By removing counterparty credit risk, it supports the stability of large scale financial derivatives and crypto asset markets.

It is the gold standard for high value, time sensitive transactions across global banking networks.