Post-Trade Settlement

Definition ∞ Post-trade settlement refers to the processes that occur after a financial transaction is executed, involving the confirmation, clearing, and final transfer of assets and funds between parties. In traditional finance, this can be a multi-day process involving numerous intermediaries. Distributed ledger technology (DLT) seeks to streamline and accelerate post-trade settlement by enabling near-instantaneous and immutable record-keeping. It aims to reduce friction and risk.
Context ∞ The modernization of post-trade settlement using blockchain and DLT is a significant area of focus for institutional adoption of digital assets, often reported in financial news. Central banks and large financial institutions are exploring how DLT can reduce operational costs and systemic risk in securities and derivatives markets. The efficiency gains offered by DLT in this domain are a key driver for its implementation in traditional finance.