Definition ∞ Digital exchange settlement is the final and irreversible transfer of digital assets between parties on an exchange platform. This process confirms the completion of a trade, ensuring that the buyer receives the assets and the seller receives the corresponding payment, typically in another digital asset or fiat currency. It contrasts with traditional financial settlement, which often involves multiple intermediaries and takes longer. Instantaneous or near-instantaneous settlement is a key characteristic of many digital asset exchanges.
Context ∞ The discussion around digital exchange settlement focuses on improving efficiency, reducing counterparty risk, and ensuring regulatory compliance. A critical future development involves the broader adoption of atomic swaps and layer-2 solutions to enable faster, more secure, and lower-cost cross-chain settlements.
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