What Is the Role of a Matching Engine in a Centralized Exchange?

The matching engine is the core technological component of a Centralized Exchange (CEX). Its role is to efficiently and fairly match incoming buy and sell orders from the order book.

It operates under a specific set of rules, usually price-time priority, to determine which orders should be executed against each other. By rapidly and privately executing these matches, the matching engine prevents external market manipulation, including front-running, by keeping the order flow confidential until execution.