Settlement
The moment a trade becomes final and the asset and the payment have actually changed hands.
On a blockchain, settlement happens when the transaction is included in a block and enough confirmations have accumulated for reversal to be impractical; some networks provide explicit finality after a defined step instead. On a decentralized exchange, settlement is atomic, meaning both legs of the swap occur in one transaction or neither does, which removes the risk of paying and receiving nothing. Inside a centralized exchange, trades settle instantly in the venue's own database and never touch a blockchain unless a customer withdraws, which makes the customer an unsecured creditor in the meantime. Equity markets separate trading, clearing, and settlement across institutions and a business-day cycle; digital-asset settlement compresses these steps but removes the intermediary that could reverse an error.
In practice
An exchange requiring a set number of confirmations before crediting a deposit is applying a settlement rule, not an arbitrary delay.
The common misunderstanding
A confirmed blockchain transaction and a settled trade are not always the same event; a trade booked inside an exchange may never settle on a blockchain at all.