Atomic Cross-Chain Settlement Model for Central Banks Digital Currency

Abstract Current securities settlement systems employ various strategies to manage risks in settlement effectively. However, exchanging and verifying information between the market participants and intermediaries is time consuming.In addition, the back office and coordination costs are very high. To address such challenges, blockchain technology has attracted the attention of researchers due to its potential as a new settlement system. In this study, we propose a blockchain-based settlement system using cross-chain atomic swaps that can be implemented for the central banks digital currency (CBDC). The proposed model adds an administrator ledger to the system to remove settlement failure and improve efficiency in market management. Along with our settlement system, we also propose a new lattice-based sequential aggregate signature scheme generally known for its advantage on resisting future quantum attacks. Proof-of-concept experiments with the proposed system were conducted to analyze the effect of numerous variables in the blockchain ecosystem on the settlement system.