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What Is the Difference between Settlement Risk and Credit Risk in This Context?

Credit risk is the risk of default; settlement risk is the specific risk of non-simultaneous exchange of value (DVP failure).
Greeks.Live11.11.25

What Is the Difference between Settlement Risk and Credit Risk in This Context?

Credit risk is the risk that a counterparty will be unable to meet its financial obligations under the contract at any point. Settlement risk is the risk that the exchange of value (e.g. crypto for fiat) does not occur simultaneously, meaning one party delivers their side while the other defaults before delivery.

Settlement risk is a specific type of credit risk that arises during the final phase of a transaction.

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