Credit risk is low in digital asset transactions because the transactions are made instantaneously, which removes the counterparty performance window that generates credit risk in traditional custody.
Source quote, verbatim
Fortunately, this risk is low in digital asset transactions because transactions are made instantaneously.
Wulf A. Kaal, Hayley Howe, Custody of Digital Assets (2021). SSRN: https://ssrn.com/abstract=3936876
Holds when
on chain digital asset transactions
Classification
mechanismsupport: assertedrisk-and-incentives
Related claims
restateskaal:claim:3411110-003 Blockchain reduces counterparty credit risk through a specific mechanism: a single shared ledger compresses th...
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