Same Day Settlement

Definition ∞ Same Day Settlement refers to the completion of a financial transaction, including the final transfer of assets and funds, within the same business day it was initiated. This process significantly reduces counterparty risk and improves capital efficiency compared to traditional multi-day settlement cycles. It ensures prompt finality for financial obligations. This enhances market liquidity and trust.
Context ∞ The move towards same day settlement, and even instant settlement, is a major driver for innovation in traditional finance and a native capability of many blockchain systems. This speed is a significant advantage for digital asset markets, where transactions can often settle within minutes or seconds. News frequently discusses how this efficiency impacts global financial infrastructure and cross-border payments.