Europe is scheduled to transition to T+1 settlement on October 11, 2027, reducing the time between a securities trade and the exchange of assets and payment from two days to one. Speaking in Frankfurt am Main at an EU T+1 Industry Committee event, European Central Bank Executive Board member Piero Cipollone stated that the change is part of a broader modernisation effort to make Europe's financial and payment systems more efficient, resilient, and competitive. The Eurosystem is contributing across its mandate through initiatives including cash availability, digital euro preparations, wholesale payments modernisation, and cross-border payment enhancements using distributed ledger technology.
The shift to T+1 is designed to reduce market and counterparty risk while compelling the review of post-trade processes to drive greater standardisation, automation, and innovation. The European Central Bank, the European Securities and Markets Authority, and the European Commission are supporting market preparations, with public authorities and the private sector collaborating through the EU T+1 Industry Committee. Implementation and testing remain critical over the coming months.
The Eurosystem's TARGET2-Securities platform already accommodates shorter settlement cycles, handling substantial transaction volumes on T+1 and T+0 bases. Adjustments to night-time settlement processes are scheduled for June 2027 to prepare for the October market migration.
Alongside T+1, technological transformations involving distributed ledger technology and tokenisation are reshaping finance by potentially unifying issuance, trading, clearing, settlement, custody, and asset servicing into shared digital environments. Since March 30, the Eurosystem has accepted marketable assets issued in central securities depositories via distributed ledger technology as eligible collateral for credit operations, and is assessing criteria for DLT-based assets outside currently eligible systems.
Since September 21, the Pontes initiative has enabled wholesale transactions in tokenised assets to settle in central bank money by connecting market DLT platforms with TARGET Services. The Eurosystem plans to enhance Pontes by extending operating hours significantly by mid-2027, achieving 24/7/365 availability in 2028, and introducing immediate settlement finality on the Eurosystem DLT platform next year. Meanwhile, the Appia project is exploring an integrated European ecosystem for tokenised finance, with a blueprint of findings and recommendations targeted for 2028 following a public consultation that concluded with broad market support.
Existing infrastructures such as TARGET2-Securities will coexist alongside tokenised platforms rather than disappear, ensuring that traditional and new systems operate together while preserving central bank money safety and preventing new technological silos.
