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Finality is the point after which a settlement cannot be reversed. It matters because a bank can then stop carrying counterparty exposure and act on the funds. Finality raises two questions: each has a different answer.

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Technical finality

Technical finality is the point when the ledger will not reorganize the transaction away. A chain with probabilistic finality never reaches certainty: confidence only increases over time. This property creates practices such as waiting for a number of confirmations. A chain with single-block finality reaches it immediately: a transaction is either in a committed block or did not happen. The digital ledger inherits this property from its underlying chain. Cosmos EVM provides instant single-block finality. An alternative chain provides whatever its own consensus provides, so chain choice affects settlement timing. Legal finality is the point when the transfer becomes irrevocable under law. It depends on the rail and jurisdiction, not the chain. A settlement can be technically final while remaining legally reversible: the gap creates a real exposure. A traditional rail typically has a defined point of irrevocability set by its scheme rules. A stablecoin rail settles when the chain settles, but the asset’s legal characterization remains a separate question.
Legal finality depends on the rail, the jurisdiction, and the bank’s own regulatory position. The bank’s compliance and legal functions must confirm it: technical behaviour does not establish legal finality.

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Why it matters operationally

Finality is the boundary that determines several outcomes elsewhere in the system. It determines when an obligation can be marked settled instead of pending. It also determines how long counterparty exposure is carried, which drives settlement frequency. It defines the one case where reconciliation does not defer to the core ledger: an externally settled movement cannot be reversed, so the entry must be posted to the core instead of adjusting the digital ledger. See Reconciliation.
This page is a placeholder for rail-specific detail. The point of irrevocability for each supported rail still needs to be documented, along with how a pending settlement is surfaced to an operator.