Abstract This chapter examines how central counterparties (CCP) evolve from informal market clubs to pivotal financial market infrastructures mandated by public policy. It outlines the transformation of CCPs as they expand their roles and adopt robust risk management frameworks, such as layered margining, default waterfalls, and recovery and resolution mechanisms. The chapter explains how CCPs actively mitigate counterparty credit risk and manage liquidity by employing strategies like initial margin calls, skin in the game, and mutualised default funds. It highlights how market practices and regulatory interventions continuously drive enhancements in CCP governance, legal frameworks, and operational resilience. Finally, the chapter emphasises how these evolving regulatory and market dynamics sustain the stability and efficiency of global financial systems.