Trust Fabric

Glossary of the Settlement Integrity Institute · v1.0 · Group I — Foundations

Definition

The composite of legal, operational, custodial, technical, and governance arrangements that together determine whether a settlement system can be relied upon to deliver value with finality, under stress, across jurisdictions and counterparties. Trust Fabric is not a single component, a single party, or a single jurisdiction's regulatory regime. It is the integrated condition produced when all of these elements hold simultaneously.

Notes

Where U.S. regulators have clarified the permissibility of bank participation in tokenized settlement,1 they have not — and do not purport to — define the fabric within which that participation must hold together. International standard-setters describe such a fabric without naming one.2,3 Trust Fabric supplies the name.

The term carries three operational properties. Fabric implies weave: the strength of the system is the strength of the weakest binding between elements, not the strength of the strongest element. Trust is conferred, not asserted — it is the output of a system that has been examined, not a property an issuer can claim. Fabric implies inspectability: a fabric can be tested at any point, and a tear in one place compromises the whole.

See also

Operational Suitability · Infrastructure Trust Boundary · Assurance Gap · Methodology Authority · Settlement Substrate

References

  1. ↩ Office of the Comptroller of the Currency, Interpretive Letter 1183: Letter Addressing Certain Crypto-Asset Activities (March 7, 2025). occ.gov
  2. ↩ Financial Stability Board, High-level Recommendations for the Regulation, Supervision and Oversight of Global Stablecoin Arrangements: Final Report (July 17, 2023). fsb.org
  3. ↩ Committee on Payments and Market Infrastructures & International Organization of Securities Commissions, Application of the Principles for Financial Market Infrastructures to Stablecoin Arrangements (July 13, 2022). bis.org