A matching engine is a software system that automatically pairs buy and sell orders on an exchange using rules such as the price-time priority rule. It processes trades with speed and accuracy, enabling efficient market operation. In cryptocurrency trading, a matching engine is the core of execution infrastructure and ensures real-time processing of transactions.

When a user places a limit or market order on a like Binance or Coinbase, the matching engine scans the for a suitable counterparty. If a match is found, the trade is executed instantly. This process ensures fair price discovery, maintains , and supports reliable trading.