---
title: "FX settlement"
description: "The exchange of the two currencies that completes a foreign-exchange trade — where cross-currency payments incur cost, delay, and settlement risk."
reviewedBy: "Nikhil Srinivasan, Founder & CEO"
updated: "July 2026"
canonical: "https://infinite.net/learn/glossary/fx-settlement"
---

# FX settlement

FX settlement is the final step of a foreign-exchange transaction: the actual exchange of the two currencies, with each party delivering the currency it sold and receiving the currency it bought. For businesses, it is the step where a cross-currency payment picks up its real costs — the spread over mid-market, the settlement lag (spot FX conventionally settles in two business days, "T+2"), and settlement risk if one side pays out before receiving the other.

The classic failure mode is called Herstatt risk, after a 1974 bank failure: one party delivers its currency and the counterparty collapses before delivering the other side. Interbank markets mitigate it with payment-versus-payment (PvP) settlement through systems like CLS, which release each currency leg only if the other settles; businesses mostly experience FX risk as opaque pricing, prefunded balances waiting in foreign accounts, and reconciliation across providers.

Infinite builds FX into the same account as every other payment: quotes, execution, and settlement across currencies like GBP, EUR, MXN, and BRL run through the same API and reconcile on the same ledger — and Transfer Routes can weigh an FX conversion against other paths for each payment.

## Frequently asked questions

### How long does FX settlement take?

Spot FX conventionally settles two business days after the trade ("T+2"). The lag exists to arrange delivery of both currencies across time zones — and it is where settlement risk lives. [T+0 settlement](https://infinite.net/learn/glossary/t-plus-0-settlement.md)

### What is Herstatt risk?

FX settlement risk, named for a 1974 bank failure: one party delivers the currency it sold and the counterparty collapses before delivering the other side. Interbank markets mitigate it with payment-versus-payment settlement. [Foreign Exchange](https://infinite.net/payments/fx)

### What is CLS?

CLS is the interbank settlement system that removes FX settlement risk for its member banks by settling both currency legs payment-versus-payment: neither side’s payment is final unless the other’s is. It settles trillions of dollars in instructions daily across 18 major currencies.

## Where it fits on Infinite

- [Foreign Exchange](https://infinite.net/payments/fx)
- [Transfer Routes](https://infinite.net/payments/transfer-routes)
- [Global treasury management](https://infinite.net/use-cases/global-treasury-management)

## See also

- [Correspondent banking](https://infinite.net/learn/glossary/correspondent-banking.md)
- [Stablecoin](https://infinite.net/learn/glossary/stablecoin.md)