How Does a Clearing House Handle Settlement for Physically-Delivered Vs. Cash-Settled Futures?

For physically-delivered futures, the clearing house oversees the actual transfer of the underlying asset from the seller to the buyer on the expiration date. For cash-settled futures, no physical asset changes hands.

Instead, the clearing house calculates the difference between the contract price and the final settlement price. It then facilitates the transfer of the cash difference between the buyer and seller.

Most crypto futures are cash-settled.