How Do Crypto Exchange Wallets Simplify or Complicate Physical Settlement?
Exchange wallets can simplify physical settlement by providing an integrated system where the exchange handles the on-chain transfer internally between the buyer's and seller's exchange accounts, reducing external network fees and transfer risk. However, they complicate it by requiring both parties to trust the exchange's custody and internal transfer mechanisms.
If a trader wishes to take delivery to a private, non-exchange wallet, the external transfer process, including gas fees and network congestion, reintroduces complexity.
