> ## 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 Options

> The rails for settling interbank obligations and how to choose between them.

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

| Rail                             | What moves                                                                                                    | Typical use                                                                                      |
| -------------------------------- | ------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------ |
| Stablecoin on a settlement chain | A settlement asset such as USDC, moved between custodial wallets                                              | Counterparties already holding digital assets, and cross-border where traditional rails are slow |
| Tokenized deposit network        | Settlement across a shared network such as [Cari](/settlement/tokenized-deposit-networks), Canton, or Partior | Counterparties who are members of the same network                                               |
| Traditional rails                | Fiat over ACH, wire, or an equivalent domestic rail                                                           | Counterparties who prefer to keep settlement on existing infrastructure                          |

Settlement over a stablecoin rail runs through the bank's custody provider. See
[Settlement Asset Custody for 24/7 Payments](/digital-asset-custody/settlement-for-payments).
The networks themselves are covered in
[Tokenized Deposit Networks](/settlement/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

<Note>
  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.
</Note>

## Related

* [How Settlement Works](/settlement/overview)
* [Finality](/settlement/finality) for when settlement becomes irreversible
* [Settlement](/cts-settlement/overview) for operating settlement across a network