Smart Contract Settlements

Every transaction and contract state change is recorded on an immutable ledger, creating a perfect, timestamped audit trail. This dramatically simplifies regulatory reporting (e.g., for SOX, MiFID II) and dispute resolution. Auditors can verify the entire history of an agreement in real-time, reducing audit preparation time and cost.

• Example: In supply chain finance, proving the provenance and payment conditions of goods becomes trivial for customs and financial regulators.

Encode complex, multi-party business rules directly into the contract logic. This enables conditional payments, escrow services, and revenue-sharing models that execute with precision. It allows for innovative products like parametric insurance that pays out automatically when a verifiable external event (e.g., a flight delay) occurs.

• Example: A construction project with milestone-based payments that auto-release upon verified completion reports from inspectors.

Replace manual, paper-heavy processes with self-executing smart contracts. Automate payment upon verified shipment milestones (e.g., Bill of Lading upload), reducing settlement from weeks to minutes. Key benefits:

• 70-80% reduction in processing costs and administrative overhead.
• Eliminate reconciliation errors and fraud risk with a single source of truth.
• Real-world example: Marco Polo Network and we.trade have piloted this, cutting invoice financing time from 10 days to under 24 hours.

Move from T+2 (trade date plus two days) to instantaneous atomic settlement (T+0). Smart contracts ensure the transfer of assets and payment occur simultaneously, eliminating counterparty risk and freeing up capital. Key benefits:

• Reduce capital requirements by billions by removing settlement float.
• Mitigate systemic risk from failed trades.
• Real-world pathfinder: The DTCC's Project Ion is a live pilot for US equity settlements, demonstrating the operational feasibility of T+0.

Automate progress payments in construction, manufacturing, and logistics based on verified IoT sensor data or digital signatures. Payments trigger automatically when a GPS-tracked delivery arrives or a quality inspection is digitally signed. Key benefits:

• Improve cash flow for suppliers with faster, predictable payments.
• Reduce disputes with immutable, auditable proof of performance.
• Example: A pilot with a major automaker tied payments to part deliveries verified by RFID scans, cutting invoice disputes by over 90%.

Deploy parametric insurance smart contracts that pay out instantly when pre-defined, verifiable conditions are met (e.g., flight delay data, weather index, earthquake magnitude). Key benefits:

• Radically improve customer experience with instant, no-claims-form payouts.
• Lower operational costs by automating adjudication.
• Proven case: Etherisc's flight delay insurance pays policyholders directly to their wallets within minutes of a qualified delay, demonstrating >95% cost efficiency gains.

Bypass correspondent banking networks by settling payments directly between corporate treasuries using stablecoins or tokenized deposits on a shared ledger. Key benefits:

• Reduce fees from ~3-5% to less than 1%.
• Settle 24/7/365 in seconds, not days.
• Increase transparency with real-time tracking.
• Pilot evidence: J.P. Morgan's Onyx and the Monetary Authority of Singapore's Project Guardian have executed live multi-currency transactions, proving the model.

Automate and transparently distribute royalties for media, software, or patented technology using smart contracts. Each sale or license triggers a pro-rata, immutable payout to all rights holders. Key benefits:

• Eliminate manual calculation and distribution cycles (often quarterly).
• Provide real-time transparency to creators, building trust.
• Reduce audit costs with a perfect, tamper-proof ledger.
• Industry move: Major music consortia and the NBA are actively exploring this to solve long-standing royalty disputes.