What Is ‘Finality’ and Why Is It Essential for Derivatives Settlement?

Finality is the guarantee that once a transaction is recorded on the blockchain, it cannot be reversed, altered, or canceled. For derivatives settlement, this certainty is paramount.

Without finality, a contract's trigger event or collateral transfer could be undone, leading to catastrophic failure of the financial agreement. High finality ensures trust and allows for reliable, automated settlement via smart contracts.