To secure wholesale financial flows, central banks manage Real-Time Gross Settlement (RTGS) systems. These systems process and settle transactions continuously on a transaction-by-transaction basis. [1, 2, 3]

Sending Bank files wire instruction -> System checks Sending Bank reserve balance -> Reserves transferred instantly -> Settlement is final and irrevocable

By executing settlements instantly, RTGS systems eliminate Settlement Risk—the threat that a sending bank defaults mid-day before its transactions clear. Once a transaction is settled within an RTGS network, the payment is final and irrevocable, preventing domino-effect defaults across the financial sector.