What is a key feature of 'atomic settlement' that the Bank of England is investigating?

A key feature of 'atomic settlement' that the Bank of England is investigating is linked asset transfers along with settlement. This concept emphasizes the importance of ensuring that the transfer of assets (such as securities or property) is executed simultaneously with the corresponding payment. By linking these two processes, atomic settlement aims to eliminate the risk of one party fulfilling their obligation while the other does not, which is often referred to as settlement risk.

In this framework, the settlement of transactions is designed to occur as a single, indivisible process. This means that both the transfer of funds and the transfer of assets take place at the exact same time, ensuring that both parts of a transaction are settled together. This reduces the likelihood of issues arising from delays or failures in either the payment or asset transfer, enhancing security and confidence in the transaction processes. It is particularly relevant in improving the efficiency and reliability of payment systems.