Why programmable financial processes require settlement finality in central bank money
Author: Thomas Feiler
Visualising realtime global settlement: A programmable financial world in which currencies, liquidity and trust move seamlessly across borders, illustrating the shift from accelerated execution towards interoperable, risk-free settlement at a global scale.
Abstract
Over the past decade, corporate treasury has undergone a fundamental transformation. What was once characterised by batch-based processing, manual intervention and rigid cut-off times is increasingly evolving towards event-driven, automated and near-real-time liquidity management. Recent initiatives by global industrial corporates, particularly in capital-intensive and globally distributed sectors such as automotive manufacturing, illustrate how treasury functions are becoming programmable, condition-based and increasingly software-defined.
This evolution, often described as Realtime Treasury, represents a genuine step change rather than incremental optimisation. Fully automated foreign exchange transactions, triggered by predefined liquidity conditions and executed outside traditional banking hours, demonstrate that treasury operations are no longer constrained by legacy operating models. Despite these advances, however, a critical architectural boundary remains largely unchanged: settlement continues to occur predominantly in commercial bank money, typically within closed or single-institution ecosystems.
This article argues that the next phase of transformation cannot be achieved through further optimisation of payment execution alone. Instead, it requires the integration of programmable treasury logic with interoperable settlement layers in central bank money. Only such an architecture can deliver true end-to-end settlement finality, materially reduce counterparty and settlement risk, and scale reliably across borders, currencies and market conditions.
Using the RELEVANT framework: Regulatory, Economic and Legal Enablement through Value Alignment and Networked Trust, as an architectural lens, the article positions programmable treasury, instant payments and central bank initiatives not as isolated developments, but as interdependent components of a coherent financial stack. Automotive treasury is examined not as an exception, but as a leading indicator of the structural changes required to support real-time global trade.
The Rise of Realtime Treasury
Corporate treasury has long been shaped by the constraints of banking infrastructure rather than by the operational needs of global industry. Liquidity management, foreign exchange execution and cross-border payments evolved around batch cycles, manual approvals and fragmented correspondent banking networks. While these models proved sufficient in a slower and less interconnected world, they have become increasingly misaligned with the realities of modern global commerce.
Today’s industrial value chains operate continuously across time zones, currencies and jurisdictions. Capital-intensive sectors such as automotive manufacturing manage globally distributed production, supplier and sales networks under constant pressure on liquidity and working capital. In this environment, liquidity is no longer a static balance-sheet position, but a dynamic operational resource that must be available at the right place, in the right currency and at the right time.
Against this backdrop, Realtime Treasury has emerged as a practical operating model rather than a theoretical ambition. Advances in automation, data standards and system integration have enabled treasury functions to move from reactive execution towards rule-based orchestration. Instead of initiating transactions manually, treasury teams increasingly define conditions under which payments and FX transactions are triggered automatically. Decision logic shifts from individuals to systems, while treasury retains control through policy and parameter setting.
Programmable Treasury in Practice
What distinguishes the current phase of treasury evolution from earlier digitalisation efforts is not speed alone, but programmability. In traditional models, automation typically followed a human decision. Programmable treasury inverts this logic: predefined conditions become executable instructions.
Recent industry implementations illustrate this shift. Automated FX transactions triggered by liquidity thresholds allow treasury to respond to real-time balance positions without manual intervention. Execution can occur outside traditional banking hours and within minutes rather than days. These capabilities represent more than operational efficiency gains; they signal a change in how treasury perceives control, timing and risk.
Earlier optimisation initiatives focused on extending cut-off times or improving message flow efficiency, often without altering the underlying settlement architecture. While such approaches reduced friction, they preserved sequential processing, delayed finality and manual oversight at critical points. By contrast, programmable treasury collapses these steps into a single automated flow driven by real-time state rather than scheduled events.
At the same time, the limits of current implementations become increasingly visible. Despite their technical sophistication, most programmable treasury solutions operate within commercial bank infrastructures. Settlement typically takes place in commercial bank money, often within single-bank or closed-network environments. While tokenised deposits and on-chain representations accelerate execution and simplify reconciliation, they do not alter the fundamental nature of settlement finality.
The Architectural Boundary of Commercial Bank Money
Commercial bank money represents a private liability. Regardless of whether it appears as a traditional account balance, a correspondent banking claim or a tokenised ledger entry, it remains a claim on a specific financial institution. This distinction is often obscured by technological abstraction, yet it remains decisive from a systemic perspective.
In stable market conditions, this dependency may appear immaterial. However, global trade and treasury operations must function precisely under stress. As execution accelerates and processes become continuous, settlement risk does not disappear; it becomes more immediate. Tokenisation may change the technical form of settlement, but it does not change its risk profile.
Single-bank ecosystems illustrate this trade-off clearly. They enable deep automation and fast execution precisely because they control the full processing chain. Yet they limit interoperability and introduce new forms of dependency that global corporates have historically sought to avoid. Conversely, correspondent banking networks offer reach and redundancy at the cost of speed and programmability.
As treasury actions become automated and persistent rather than episodic, this architectural mismatch becomes increasingly significant. Faster execution compresses time, but it does not resolve finality. Without a settlement asset that is universally trusted and risk-free, automation merely accelerates exposure.
Why Settlement Finality Still Matters
Settlement finality determines when a transaction becomes irrevocable and unconditional. In real-time environments, this distinction moves from the background to the centre of architectural relevance.
Foreign exchange transactions highlight the issue particularly clearly. Principal risk arises when one leg of a transaction settles before the other. While mechanisms such as Payment-versus-Payment mitigate this risk, they remain dependent on the settlement assets available within participating systems. Where settlement occurs in commercial bank money, counterparty and liquidity risk persist.
From a regulatory perspective, settlement risk is explicitly recognised in frameworks such as Basel III, which address counterparty exposure, intraday liquidity risk and systemic resilience. Faster settlement cycles reduce outstanding exposures, but they also compress the time available to absorb shocks. In such an environment, the quality of the settlement asset becomes more important, not less.
Central bank money occupies a unique position. It represents the ultimate risk-free settlement asset within a currency area, backed by the issuing central bank and insulated from private credit risk. As treasury operations move towards continuous execution, reliance on indirect access to this layer through commercial banks appears increasingly misaligned with operational reality.
RELEVANT and the Programmable Stack
The growing diversity of initiatives across payments, settlement, digital assets and central bank innovation highlights a structural challenge: progress is no longer constrained by technology, but by the absence of a coherent architectural frame.
The RELEVANT framework provides such a frame. Together with the concept of a programmable financial stack, it treats payments, compliance, liquidity, FX and settlement as interdependent components of a single policy-aware system. None of these components can be optimised sustainably in isolation.
Within this perspective, transactions are not discrete message exchanges, but executable expressions of economic intent and regulatory constraints embedded within value chains. Programmability extends beyond conditional payment triggers to encompass compliance logic, liquidity allocation, FX execution and settlement selection. Settlement becomes a foundational layer rather than a post-processing step.
RELEVANT anchors innovation in institutional trust. It recognises that accelerating execution without addressing settlement finality introduces new forms of fragility, and that programmability without a legally and economically sound settlement asset merely accelerates exposure.
Existing Initiatives in Context
Viewed through the RELEVANT lens, many current initiatives can be understood as partial realisations of a broader transition. BIS-led projects such as mBridge and Nexus focus on the settlement layer, exploring wholesale CBDC and interoperable instant payment infrastructures. Industry-driven solutions address orchestration and execution, while retail CBDC initiatives emphasise access and resilience.
What remains missing is integration. Programmable payments are deployed without programmable settlement. Central bank settlement experiments progress without direct linkage to corporate treasury workflows. The absence of a shared architectural logic limits systemic impact.
Conclusion
Realtime treasury is no longer a future concept. It is operational reality. Yet its full potential remains constrained by a settlement architecture still anchored in commercial bank money.
This article has argued that the next phase of transformation lies in integrating programmable treasury logic with interoperable settlement layers in central bank money. Automotive treasury should be understood not as a special case, but as a leading indicator of where global financial infrastructure must evolve to support real-time trade without introducing new systemic risk.
Realtime treasury is becoming reality.
Designing the settlement layer capable of sustaining it is now the defining challenge for global financial infrastructure.
References / Further Reading
Bank for International Settlements (BIS) & BIS Innovation Hub
Bank for International Settlements (2020)
Enhancing Cross-border Payments: Building Blocks of a Global Roadmap
BIS Committee on Payments and Market Infrastructures (CPMI).
Foundational reference for global settlement efficiency, interoperability and risk reduction.Bank for International Settlements (2021)
Enhancing Cross-border Payments: Stage 2 Priorities for the G20 Roadmap
CPMI, BIS.
Defines speed, cost, transparency and access as structural objectives.BIS Innovation Hub (2022)
Project mBridge: Connecting Economies through CBDC
BIS Innovation Hub, HKMA, PBoC, CBUAE, BOT.
Key reference for wholesale CBDC and cross-border settlement in central bank money.BIS Innovation Hub (2023)
Project Nexus: Enabling Cross-Border Instant Payments
BIS Innovation Hub.
Architectural blueprint for interoperable real-time payment systems.BIS Quarterly Review (multiple editions, 2022–2024)
Ongoing analysis of tokenisation, CBDCs, FX settlement risk and market infrastructure.
European Central Bank (ECB) & Eurosystem
European Central Bank (2023)
The Digital Euro: A Payments Solution for Europe
ECB, Frankfurt.
Strategic framing of retail CBDC and European payment sovereignty.European Central Bank (2024)
Wholesale Central Bank Digital Currency: Design Considerations
ECB Occasional Paper Series.
Critical reference for settlement finality, financial stability and wholesale CBDC design.Eurosystem (TARGET Services Documentation)
TARGET2, T2S and TIPS Functional Specifications
Baseline for central bank money settlement and instant payment infrastructure in Europe.
Swift & ISO 20022
Swift (2023–2025)
ISO 20022 Migration for Cross-Border Payments and Reporting
Swift Standards Documentation.
Authoritative reference for ISO-native vs. translated message flows.Swift (2024)
ISO 20022: Unlocking the Value of Rich Data
Swift White Paper.
Highlights the difference between compliance-driven adoption and data-driven value creation.ISO (2013, updated continuously)
ISO 20022 Universal Financial Industry Message Scheme
International Organization for Standardization.
Core standard underpinning modern payment, treasury and settlement messaging.
Regulatory & Risk Frameworks
Basel Committee on Banking Supervision (2017, revised 2023)
Basel III: Finalising Post-Crisis Reforms
Bank for International Settlements.
Framework for counterparty risk, liquidity risk and intraday exposure.CPMI-IOSCO (2012, updated 2023)
Principles for Financial Market Infrastructures (PFMI)
Global benchmark for settlement finality, resilience and systemic stability.
Industry & Treasury Practice
BMW Group Treasury (2024–2025)
Public disclosures and press releases on Realtime Treasury and programmable FX initiatives.Siemens Treasury (2021–2024)
Public disclosures on programmable payments and blockchain-based treasury operations.JP Morgan Kinexys (formerly Onyx)
Public documentation on programmable payments, tokenised deposits and on-chain FX settlement.
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