Stablecoin Payments Glossary
Settlement Risk
Settlement risk is the possibility that a payment or transfer will not be completed as expected after one party has already performed its side of the transaction.
Explanation
In stablecoin systems, settlement risk may arise from network congestion, counterparty failure, off-chain intermediaries, or problems in fiat conversion and payout. It can also arise when payment confirmation is accepted before adequate finality is achieved.
Why it matters
Reducing settlement risk is essential for making stablecoin payment systems commercially reliable.
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