Skip to main content
The settlement rail is a choice rather than a fixed property of the Cosmos Tokenization Suite. CTS separates clearing from settlement: client payments clear continuously on the digital ledger, and their obligations settle afterwards over the rail agreed by both institutions. The two counterparties need to agree on the rail. They do not need to agree on providers, cores, or deployment models.

​
Available rails

Settlement over a stablecoin rail runs through the bank’s custody provider. See Settlement Asset Custody for 24/7 Payments. The networks themselves are covered in Tokenized Deposit Networks.

​
Gross or netted

Obligations settle either gross or netted, independently of the rail. Gross settlement is the settlement of each obligation in full. It minimizes the exposure carried between settlement runs, at the cost of more settlement traffic and higher liquidity requirements. Netted settlement is the offsetting of obligations per counterparty and the settlement of the difference. It reduces settlement volume and required liquidity, at the cost of a larger uncovered position between runs. Netting is commonly paired with a traditional rail: per-transaction cost and cadence make gross settlement impractical. A stablecoin rail supports either.

​
Choice criteria

Five questions determine the choice:
  • How much exposure is acceptable between settlement runs, which sets gross against netted
  • How quickly settlement must complete, which is where traditional rails are weakest
  • Whether both counterparties are members of the same tokenized deposit network
  • Whether both hold, or are willing to hold, a common settlement asset
  • What the bank’s regulator expects of each option
This page is a placeholder for the configuration detail. How a rail is selected and configured, which combinations of rail and netting mode are supported, and the operational procedure for each still need to be documented.