Glossary

Every term of the coffee trade, in plain English. No jargon.

Custody and title

Bonded: Coffee that is physically stored in a secure, customs-supervised warehouse - here, the approved DMCC warehouse in Dubai. While it is bonded, its ownership can change hands cleanly because the warehouse confirms exactly what is held.
Three-way reconciliation: A continuous check that three records of the same coffee always match: the physical bags in the warehouse, the registered title, and the digital units that represent ownership. If they diverge, the lot is frozen until it is resolved.
Digital passport: The tamper-proof record that travels with a lot: where it was grown, who grew it, its quality results, its compliance evidence and every change of ownership. Anyone reviewing a lot reads the same passport.
Warrant: A registered title issued against coffee held in a bonded warehouse. It is the formal record of who owns the goods, and it can be transferred or pledged as security - here through the DMCC Tradeflow registry.
Draw-down: When an owner takes physical delivery of coffee from the bonded warehouse. The matching digital units are retired at the same time, so the records stay in balance with what is physically left.

Safe settlement: The moment a trade completes: payment moves to the seller and ownership moves to the buyer in the same step, and only after the warehouse confirms the coffee. Neither side can be left short - no one can be cheated.
Settlement trigger: The single event that allows a trade to settle: the warehouse confirming it has received the coffee and checked its quality. No person, and no automated assistant, can release a settlement - only this confirmation can.
Differential: The amount added to or subtracted from the benchmark market price to reach the price of a specific coffee, reflecting its origin, quality and demand. A higher-scoring lot typically carries a positive differential.
Settlement account: The bank account, held at a partner bank under a control agreement, that buyers pay into and that pays sellers. It is held by the lender, never by xchange - the platform prepares instructions, the bank executes them, and no customer funds ever rest with the platform.
Payment reference: A short, unique code tied to a single trade. Quoting it on your bank transfer lets operations match your incoming payment to the right trade quickly and without guesswork.
Settlement instruction: The document that sets out, to the cent, how a trade's proceeds are shared - the lender repaid first, then the platform fee, then the seller - along with the verified beneficiary account. It needs two human approvals before the bank acts on it.

Quality fingerprint: A measured profile of a coffee captured at a stage of its journey. Comparing fingerprints taken at origin and at the warehouse proves the coffee offered is the coffee delivered, and flags any substitution.
CVA (cupping assessment): The Coffee Value Assessment: a standardised way to taste and score a coffee's quality across attributes like aroma, flavour and acidity. The resulting score is shown on every lot.

Due-diligence statement (DDS): A document confirming a lot meets deforestation-free requirements, built from the lot's plot data and its satellite analysis. It is assembled from structured records, never written as free prose, and carries a named human owner.

Lien: A financier's secured claim over a specific bonded, warranted lot used as collateral for an advance. The lien is only ever taken over coffee that is already in the warehouse - never over a future crop.
Lender of record: The bank or finance house that provides financing and carries the credit risk. xchange arranges and services the facility for a fee and never lends its own money or takes credit risk.

Verification tier: How far an account has completed identity and business verification. Each higher tier unlocks more of the platform - from browsing, to buying, to financing - so that value only moves between checked participants.

Terms used across xchange.coffee.