Definition ∞ Custody and Settlement refers to the processes involved in holding and transferring digital assets securely. Custody addresses the safeguarding of private keys that control access to assets. Settlement concerns the final and irreversible transfer of ownership for these assets. Both functions are essential for the operational integrity and security of digital asset markets.
Context ∞ The state of Custody and Settlement in the digital asset domain is presently evolving, with a growing demand for institutional-grade solutions. A key debate involves the balance between self-custody and third-party custodial services, considering security, accessibility, and regulatory compliance. Critical future developments include the standardization of custodial practices and the establishment of more efficient, regulated settlement layers for digital assets.