Are there any risks or drawbacks associated with t+1 settlement in the cryptocurrency futures market?

1 answers

• Mar 22, 2022 · 3 years ago
  As a third-party observer, it is important to note that t+1 settlement in the cryptocurrency futures market can introduce certain risks and drawbacks. One of the risks is the potential for regulatory scrutiny. Since the settlement occurs one day after the trade, there is a possibility for regulators to closely monitor and scrutinize the trading activities during that period. This can lead to increased regulatory compliance requirements and potential legal implications for traders. Another drawback is the impact on liquidity. With t+1 settlement, traders may face challenges in finding counterparties for their trades, especially if the settlement occurs on a different day than the majority of market participants. Additionally, t+1 settlement may also result in increased operational costs for exchanges, as they need to ensure smooth settlement processes. Overall, while t+1 settlement offers certain advantages, it is important for traders to carefully consider the associated risks and drawbacks.
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