Settlement finality is the cornerstone of trust in financial markets. It ensures that once a transaction is settled, ownership is legally transferred and cannot be unwound, even in the event of insolvency. This chapter examines the limitations of blockchain-based finality, highlighting how forks, consensus attacks, and governance failures can undermine the integrity of digital ledgers. Through real-world case studies, including high-profile insolvencies and legal disputes, we demonstrate the consequences of operating without recognised settlement systems.

A regulated digital CSD bridges the gap between technological innovation and legal certainty. By integrating enforceable legal title, robust governance, and systemic protections, a digital CSD delivers the infrastructure needed for institutional adoption, market resilience, and cross-border scalability. As regulatory frameworks evolve, such as the UK’s Digital Securities Sandbox and the EU’s MiCA and CSDR.digital asset markets are poised to benefit from the same legal safeguards that underpin traditional finance.

This chapter makes the case that only by aligning digital settlement infrastructure with established legal principles can digital assets realise their full potential. Legal finality is more than just a safeguard, it is the foundation for trust, growth, and the future of finance.