LeoGlossary: Settlement (Financial)

In the financial world, settlement is the final stage in the transaction. It is when delivery of the security or payment is delivered. Traditionally, this was done when the asset was physically delivered, whether it was a security, commodity, or currency.

Since we are in the digital era, settlement is not always done physically. Most global transactions are settled digitally using ledger. Bank reserves, as an example, are used to settle currency transactions between commercial banks.

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