Documentation for a tokenized deposit network that I've been reading indicates that the network settles the token leg immediately, on a gross basis, 24/7/365. The fiat leg nets once per business day, during standard operating hours, with off-cycle settlement only if net obligations breach a threshold. That is deferred net settlement. We have a century of experience with it. Between the moment a token moves and the moment the corresponding fiat obligation settles, the receiving bank has given value it has not been paid for. Multiply that across participants, run it through a weekend when the discount window is closed, and the question is not hypothetical: what happens when a participant cannot fund on Sunday?
Payment systems answered this long ago. Net debit caps. Collateral posted against peak exposure. A loss-allocation rule agreed in advance, so the failure of one participant does not propagate through the rest. None of it is exotic, and all of it has to be set in the rulebook rather than left to each participant.
There is a capital dimension too. Netting recognition depends on legal certainty that obligations are enforceable on default. Whether an on-chain transfer delivers that certainty, across jurisdictions, is unsettled — and the answer determines whether exposures are carried gross or net. That difference is not marginal.
Some networks are admirably specific about the architecture, which is why I can write this paragraph at all. However, most networks don't address the detail I'm looking for. What I would want to see published: the caps, the collateral, the loss-allocation rule, and the assumed behaviour on a Sunday.
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