Latest GFXC Data Show FX Settlement Risk Improvement

The Global Foreign Exchange Committee (GFXC) has released the results of its second semi-annual survey of FX settlement volumes from April 2026, within which, there are some positive signs emerging over the FX industry’s efforts to increase the use of PvP (payment-versus-payment) mechanisms.

The data is collated and presented in an identical fashion to that in the Triennial FX Turnover Survey managed by the Bank for International Settlements, although in the GFXC surveys there are less participating jurisdictions. FX committees from Australia, Canada, Euro Area, Hong Kong, Japan, Singapore, Switzerland, United Kingdom, and the US took part in the GFXC survey, although the Committee notes that the majority of global FX trade settlement is captured in these centres.

The EU and Switzerland do not take part in the semi-annual FX turnover surveys conducted by regional FX committees, and while average daily turnover in April 2026 rose by 8% year-on-year according to the latest surveys, the daily total gross financial obligations settled rose by just 1.3% over the same period, albeit compared to the broader BIS survey. At $14.372 trillion per day, however, total settlement volumes rose 8.2% from October 2025.

While there are several settlement risk-mitigating mechanisms used in a “risk waterfall” process, the key numbers in the reports are those for gross bilateral settlement, which offers no risk reduction at all as a mechanism – and it is here that there may be some positive news for the industry as it faces repeated calls to increase the use of PvP.

In the latest GFXC survey, just $191 billion was settlement on a gross bilateral basis, where the trades were eligible for applicable PvP systems. This is 1.33% of the total settlement volume and a small drop from the 1.51% in the October 2025 survey. The news is even more positive compared to the broader BIS survey, in the latter, the percentage of gross bilaterally-settled FX volume was a fraction under 2%.

The BIS has previously cited operations issues, resulting in the missing of PvP cut-off times; credit risk exposures to correspondent banks; and tight payment schedules as reasons for using gross bilateral settlement. It also noted that same-day swaps are ineligible, which may be something for the industry to look at as more jurisdictions move to T+1 settlement in their financial markets.

CLS, anecdotally, continues to dominate the space, the report shows that CLS-eligible currency pairs settle all but $20 billion per day on PvP volumes, although PvP itself is actually only the secondary mechanism, with intra-group settlement handling more volume at $6.107 trillion per day in April. The GFXC notes that this methodology can mitigate FX settlement risk, “but internal settlement, particularly cross-border, can be at risk of liquidity ring-fencing in stress scenarios”.

Pre-settlement netting is the fourth busiest mechanism at $1.965 trillion per day in the latest report, the GFXC observes this method reduces gross risk, but net amounts need to be settled, and remain subject to settlement risk. The levels of intra-group settlement and pre-settlement netting volumes have remained steady compared to both the BIS and October 2025 GFXC reports.

It remains early in the efforts of the FX industry to increase the use of PvP, but in one critical aspect – the PvP-eligible gross bilateral settlement volumes – there are encouraging signs.