Delayed Settlement
Delayed settlement is a financial and transactional concept where the final transfer of assets or funds occurs at a later time than the agreement or trade execution, often to manage risk, liquidity, or operational efficiency. It is commonly used in securities trading, payment systems, and blockchain networks to allow for verification, clearing, or regulatory compliance before settlement. This mechanism helps prevent fraud, reduce counterparty risk, and ensure smoother financial operations.
Developers should learn about delayed settlement when working on financial technology (fintech), trading platforms, or blockchain applications, as it is critical for implementing secure and compliant transaction systems. It is used in scenarios like stock exchanges where trades settle after a few days (e.g., T+2), in payment gateways to handle chargebacks, or in decentralized finance (DeFi) to add security layers. Understanding this concept helps in designing systems that balance speed with reliability and regulatory requirements.