Bilateral settlement denotes a direct exchange of assets or obligations between two parties without the need for an intermediary clearinghouse. This process concludes a transaction by moving assets from one participant to another. It typically occurs when two entities agree to a direct transfer, finalizing their respective positions. The direct nature often aims for reduced counterparty risk and increased efficiency.
Context
Bilateral settlement in digital asset markets is gaining traction for reducing costs and speeding up transaction finality. News frequently covers its application in institutional trading or over-the-counter markets. Regulatory bodies assess its implications for market stability and transparency, particularly concerning systemic risk.
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