Settlement Delays

Definition ∞ Settlement delays refer to extended periods between the initiation of a financial transaction and its final, irreversible completion within a payment or asset transfer system. These delays can arise from various factors, including network congestion, manual processing requirements, or the operational hours of intermediary institutions. In traditional finance, they are common for cross-border payments, while in crypto, they can occur during periods of high network activity. Such delays impact liquidity and transaction efficiency.
Context ∞ News reports often discuss settlement delays when comparing traditional financial systems with the purported speed of blockchain-based transactions. While cryptocurrencies generally offer faster settlement, network congestion on popular blockchains can still lead to delays and increased fees, particularly during periods of high demand. Efforts to improve scalability and interoperability in both traditional and digital finance aim to minimize these delays.