> ## Documentation Index
> Fetch the complete documentation index at: https://cts-docs.cosmos.network/llms.txt
> Use this file to discover all available pages before exploring further.

# Settlement

> How a bank settles interbank obligations through the Cosmos Tokenization Suite: obligation tracking, netting, and the settlement rail chosen at onboarding.

Settlement discharges what a bank owes its counterparties. In the Cosmos
Tokenization Suite, the model has one fixed part and one chosen part. CTS
always tracks the obligations. The rail they settle over is chosen by the bank at
onboarding.

## The fixed part: obligation tracking

CTS keeps track of the obligations to other banks as client payments clear.
Every obligation is available through CTS for metrics and reporting,
regardless of which rail eventually settles it.

This means the bank's view of what it owes and is owed does not depend on the
settlement network. The network discharges obligations: the record of them lives
with the bank.

## The chosen part: the settlement rail

The rail is selected during onboarding and is custom per bank. The options are
the ones described in [Settlement Options](/settlement/settlement-options): a
tokenized deposit network, a stablecoin rail through the bank's custody provider,
or traditional rails.

Settlement runs periodically or on demand, at a cadence set by what the bank is
comfortable with and what its requirements allow.

## Settling through a consortium network

A bank that is a member of a tokenized deposit consortium, such as
[Cari, Canton, or Partior](/settlement/tokenized-deposit-networks), sets that
network up as its settlement mechanism. The bank deploys CTS; the network
carries the settlement.

Two boundaries matter here, and both are stated plainly because they surprise
people:

* Cosmos provides the integrations to these networks. It does not provide the
  legal agreements between the bank and the network, or between counterparties,
  that secure settlement requires. Membership, rulebooks, and bilateral
  agreements are the bank's to arrange with the network.
* Netting is performed either by the settlement network or by CTS,
  depending on the network. Where the network nets, CTS still records
  every underlying obligation, so reporting is unaffected by who nets.

## What a deployment involves

<Steps>
  <Step title="Deploy CTS">
    The bank runs Issuance, which is what records obligations as payments clear.
    See [Issuance](/cts-issuance/overview).
  </Step>

  <Step title="Choose the rail at onboarding">
    Consortium network, stablecoin, or traditional rails. The choice is custom
    per bank. See [Settlement Options](/settlement/settlement-options).
  </Step>

  <Step title="Arrange the network relationship">
    For a consortium rail, the bank joins the network and puts the required
    legal agreements in place. CTS connects to it; it does not stand in
    for membership.
  </Step>

  <Step title="Set the cadence">
    Periodic or on demand, based on the bank's exposure appetite and
    requirements. See [How Settlement Works](/settlement/overview).
  </Step>
</Steps>

## Related

* [How Settlement Works](/settlement/overview)
* [Settlement Options](/settlement/settlement-options)
* [Tokenized Deposit Networks](/settlement/tokenized-deposit-networks)
* [Finality](/settlement/finality)