Smart contracts on public blockchains solve this by committing coins to the contract. In effect the contract is an escrow facility in which the coins are locked up until the contract terminates.
The advantage of e.g. Ethereum blockchains is that defaults don't happen the assets are held by the contract. The drawback is that your assets are locked up for the duration of the contract, which is completely incompatible with how wholesale finance operates.
DAML's genesis was in solving this problem on private ledgers used for mediating inter-party value exchange of off-ledger assets (like dollars). To do that, rather than having an account or asset focus, it's built around the notion of rights, obligations, and enforcing a legally-compatible approach to contractual consent.
That is so that, when a "workflow" (e.g. your LIBOR swap) terminates, DAML provides a fully audited record of all the parties' agreement to be bound by the terms and consequences of the workflow itself. All being well there's an exchange of assets off-ledger. If things turn out badly, you go to court and the default is worked out with the backing of a rock-solid audit trail of affirmation (instead of a loose-leaf binder of printed emails and a dog-eared ISDA agreement.)
(I work for DA.)