Odd Lots · Thursday, August 27, 2026
Kansas City Fed President Jeffrey Schmid highlighted the potential for 'atomic settlement' in payment systems, where transactions are instant and reconciled simultaneously. He explained that this innovation, driven by technology, will move money instantaneously and reconcile it, moving away from historical concepts of 'float' and 'fees' in payments.
“What's really fascinating about what you're going to see in the next couple of days is with some of the research that's being done is we're moving toward, I've seen the words atomic settlement in the marketplace, which is actually when payments are actually going to be instant. And through our lives, at least my life, you've always talked about float and fees. There's always been a friction and a cost to payments. Well, this innovation that we have now in technology is going to move a money from me to you instantaneously and it's going to be reconciled instantaneously. So that's the atomic side of this whole settlement business.”
“And it's going to be one, very innovative, but two, it's going to be somewhat disruptive too. And so that begs the question about how do you accommodate a system that's instant.”