What Is the Role of a “Proof-of-Authority” Consensus in a Centralized Exchange’s Settlement?

Proof-of-Authority (PoA) is a consensus mechanism where block creation is managed by a small, approved set of validators (authorities). While not used for the public crypto asset settlement, a CEX may use a private or consortium blockchain running PoA for its internal settlement and ledger management.

This provides high transaction speed and low cost, as trust is placed in the pre-selected, known entities.