BoA goes live on CLS for PvP settlement infrastructure adoption

By Aarav Garg

Bank of America has gone live on CLS’s Cross Currency Swaps (CCS) service, expanding industry adoption of payment-versus-payment (PvP) settlement infrastructure as FX volumes continue to rise globally.

The move allows Bank of America to settle cross-currency swap principal exchanges through CLSSettlement’s PvP mechanism, designed to ensure both sides of a transaction settle simultaneously. The model reduces counterparty settlement risk in a market where large principal exchanges and bilateral settlement structures can create significant liquidity and operational exposures.

Lisa Danino-Lewis, Chief Growth Officer at CLS, said “With FX trading volumes at record levels and the average daily settled value continuing to grow, mitigating settlement risk has never been more important. The continued expansion of our CCS service, alongside Bank of America’s go-live, demonstrates meaningful progress in reducing risk across the FX market.”

Cross-currency swaps are widely used by banks and institutional investors to manage funding and currency risks across markets. However, traditional settlement processes can require substantial liquidity buffers and expose participants to failed settlement risk if one side of a transaction does not complete.

Carlos Fernandez-Aller, co-head of Global FICC Macro at Bank of America, commented “In an environment of heightened market volatility and increasing intraday liquidity demands, reducing unsecured settlement risk is a priority. This milestone demonstrates our commitment to reducing counterparty risk on cross currency swap initial and final principal exchanges while delivering operational and liquidity efficiencies that will support the continued growth of our FX business.”

CLS said its CCS service integrates with OSTTRA MarkitWire, enabling automated post-trade processing and multilateral netting across FX transactions. The infrastructure is intended to reduce funding requirements and improve operational efficiency for participating institutions.

The expansion comes as regulators and policymakers continue pushing for broader adoption of PvP settlement mechanisms to reduce systemic risk in foreign exchange markets. According to the Bank for International Settlements’ 2025 Triennial Survey, average daily FX turnover reached approximately $9.6 trillion in April 2025, up 28% from 2022 levels.

CLS said average daily settled value on its CCS service increased 87% during 2025, reflecting growing demand from global banks for infrastructure capable of supporting higher FX volumes, tighter risk controls and more efficient liquidity management.