A digital settlement asset is a digitally represented asset used to discharge payment, securities, foreign-exchange, or other financial obligations on a digital platform.
Possible settlement assets include central bank money, commercial bank money, tokenized deposits, stablecoins, and other digital claims, depending on the platform and legal framework. The quality of settlement depends on the issuer, credit and liquidity risk, convertibility, finality, and whether the asset is accepted at par by participants. Shared technical infrastructure does not make different settlement assets economically equivalent.
The term identifies the asset used to complete settlement. The recording technology is a separate characteristic. The issuer and legal claim determine the settlement asset's risk profile.
Choice of settlement asset determines which credit, liquidity, and convertibility risks remain after the transaction is completed.
A tokenized securities platform can settle the cash leg in wholesale CBDC, a tokenized bank deposit, or another eligible digital settlement asset.