WTF Is Orchestration (or Clearing) (or Settlement)
In traditional finance, orchestration, clearing, and settlement are critical concepts that keep money moving safely. In crypto, we’re rebuilding them — hopefully smarter, faster, more transparently, and a little less boring.
Over the past year, a few TradFi terms have started showing up in crypto conversations, including: orchestration, clearing, and settlement. These are things you might expect to hear about in a central bank meeting, not a DeFi whitepaper or the Crypto Twitter feed.
But as the crypto economy matures, these concepts are becoming increasingly relevant again. To understand why, it helps to know what they mean, where they came from, and how they’re being reinterpreted for a new kind of financial system — where some age-old market problems will still need to be solved in new ways.
What these words actually mean
When you buy something with a card, it feels instantaneous. You tap to buy your coffee, wait a couple of seconds for it to confirm, and walk away caffeinated. To you, the transaction is done.
But behind the scenes, a bunch of invisible steps happen: your bank promises the coffee shop’s bank that the money will move; the payment network (Visa or Mastercard) keeps track of who owes what to whom; and at the end of the day, all those promises are bundled, reconciled, and settled.
That multi-step process is orchestration, clearing, and settlement in action. And these things make your trust in that card-tap implicit.
Orchestration is the choreography — coordinating between all the different parties (banks, networks, processors, merchants). It’s making sure everyone’s systems talk to each other, payments get routed correctly, and the right things happen in the right order, from initiation to completion.
Clearing is the math — figuring out who owes what to whom after all the day’s transactions. Like splitting the dinner bill, but for millions of payments in a batch. “Reconciliation” is a related term you may hear.
Settlement is the money actually moving — the actual transfer of funds between payer and payee banks.
These concepts didn’t appear by accident. As finance got more complex — across more participants, jurisdictions, and time zones — markets needed mechanisms to coordinate and finalize transactions safely and predictably.
These steps exist because financial systems are networks of intermediaries, some of which play more than one role in this stack — like Visa and SWIFT to orchestrate payments, Visa (again) and ACH to clear between banks, ACH (again) and Fedwire for settlement. Each participant maintains its own ledger, and orchestration, clearing, and settlement are how those ledgers ultimately stay in sync. In the end, you want the same number of dollars redistributed into the right places, perfectly accounted for across all these different parties.
In short, these systems evolved to ensure reliability at scale. They made it possible for trillions of dollars to move daily without every transaction needing its own one-to-one settlement.
Why the same ideas matter in crypto
Crypto was supposed to fix all this, right? “Instant settlement!” “No intermediaries!”
Well…sort of.
In theory, blockchains combine orchestration, clearing, and settlement into one shared, programmable ledger. You send a transaction, it gets validated, it settles on-chain, and the ledger updates globally.
But in practice, the crypto economy isn’t one big blockchain. It’s dozens (hundreds? more?) of chains, each with its own rules, tokens, and liquidity. Users move assets across chains, applications integrate multiple protocols, and stablecoins circulate in many forms. Add in centralized exchanges, bridges, and various wallets — and suddenly, the “instant settlement, no intermediaries” dream looks a lot more like the messy real world again.
As a result, the same challenges that shaped traditional finance are resurfacing:
- How do you coordinate transactions across different systems?
- How do you reconcile the state of assets that move between them, with multi-chain trades, loans, and swaps?
- And how do you settle all this value flow in a way that’s secure and final, in seconds?
These are orchestration, clearing, and settlement challenges — just expressed through a different technology stack. Just as stablecoins are an evolutionary step in money technology, our protocol solutions for these problems need to be evolutionary steps in old guard technology.
Same words, totally new tech (and maybe a couple new insights)
To be useful and meet the demand for real-time, worldwide value flow — no longer limited by banks or borders — these functions become essential again. Every DeFi protocol, stablecoin, or cross-chain payment system needs a way to make sure the money is good and liquidity moves where it’s supposed to, with incredibly reliable systems for coordination, reconciliation, and settlement.
The huge difference now is that these systems can be expressed in code — through smart contracts, cryptographic proofs, and programmable liquidity — rather than institutional intermediaries. And many of these functions can be satisfied by the same network, since they no longer rely on banks’ proprietary hardware or COBOL era server logic.
A whole new economy
Traditional finance built orchestration, clearing, and settlement to make distributed systems of yesterday’s money work safely. Crypto is rediscovering those same needs as it scales across networks. Rebuilding them — in an open, programmable way — will be what finally allows onchain finance to operate with the reliability and reach of traditional markets, while preserving the openness that makes it worth building in the first place.
This is hard work worth doing. Every onchain use case will increasingly expect high-frequency trading-level execution on the backend. Velocity of money will be orders of magnitude higher than it is today. To meet demand, onchain solutions for orchestration, clearing and settlement must be much more performant, much more upgradeable, and much more transparent than the systems that exist today.
Hopefully, this post helps go beyond the buzzwords. Without these solutions, crypto’s fragmented state will feel all too familiar; but with them, the crypto economy will become the biggest economy that’s ever existed.
And that's what we'll write about next. Until then.
Some Endnotes
- This article written by an unapologetic em dash maximalist.
- This is intended to be a very high-level summary, to clear up some terms and map them to crypto. If you want to go deeper on topics like this, follow people like @chuk_xyz.
- If you want a great survey of TradFi payment networks compared with crypto alternatives, I suggest this piece by @arjunnchand & @kramnotmark.
About Eco
Eco is the network that powers real-time money movement across every major stablecoin and blockchain, ensuring dollars flow seamlessly across today's fragmented multichain landscape. Leading apps and protocols integrate Eco to power stablecoin flows where best-in-class execution is required — upgrading stablecoin UX throughout their ecosystems and unifying them all in a thriving Stable Economy.
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About Eco Inc.
Eco Inc. is a blockchain company building software that maximizes money’s value. The company is a founding contributor to the Eco Protocol and the builder of Bend. We expect better from our money, and we want you to as well. That’s what drives us every day.