USD Settled designates a financial contract or transaction where the final payment, profit, or loss is calculated and disbursed using United States Dollars (USD). This implies that the monetary obligations are discharged in the primary global reserve currency, rather than a volatile cryptocurrency or another fiat currency. It offers a clear reference point for financial obligations.
Mechanism
This settlement occurs either via traditional banking channels for fiat currencies or through stablecoins pegged to the USD within digital asset platforms, ensuring a direct link to the conventional financial system. For derivatives, the final cash payment is based on the difference between the contract price and the settlement price in USD. This mechanism mitigates currency conversion risks.
Methodology
The operational preference for USD settlement offers stability and regulatory clarity, particularly for institutional participants seeking to mitigate cryptocurrency price volatility and comply with established accounting standards. It provides a common denominator for risk management and financial reporting across diverse asset classes. This approach facilitates broader institutional participation by reducing operational complexities.
We use cookies to personalize content and marketing, and to analyze our traffic. This helps us maintain the quality of our free resources. manage your preferences below.
Detailed Cookie Preferences
This helps support our free resources through personalized marketing efforts and promotions.
Analytics cookies help us understand how visitors interact with our website, improving user experience and website performance.
Personalization cookies enable us to customize the content and features of our site based on your interactions, offering a more tailored experience.
