A Proposal for a Decentralized Liquidity Savings Mechanism With Side Payments

February 2018


Liquidity Savings Mechanisms (LSM) are implemented in large value settlement systems by central banks around the world to reduce liquidity demands from interbank wholesale settlement. In this paper, the authors discuss a proposal for a decentralized LSM that could better reflect market conditions in real time, and help to solve some problems inherent in current centralized systems.