Deferred Settlement

Definition ∞ Deferred settlement refers to a transaction where the final exchange of assets and funds occurs at a future agreed-upon date, not immediately. In cryptocurrency trading, this can involve arrangements where assets are traded but the actual transfer on the blockchain is delayed. This contrasts with instantaneous settlement, common in many digital asset transactions. Such mechanisms are sometimes used in over-the-counter deals or specific derivatives markets to manage liquidity or counterparty risk.
Context ∞ News reports occasionally cover deferred settlement practices in the digital asset space, particularly concerning institutional trading and regulatory oversight. The implementation of deferred settlement can introduce complexities regarding counterparty risk and collateral management. Regulators examine these practices to ensure market stability and prevent potential systemic vulnerabilities. Understanding deferred settlement provides insight into specialized trading strategies and market infrastructure considerations beyond immediate on-chain transfers.