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Europe is scheduled to move from two-day to next-day securities settlement on 11 October 2027, according to ECB Executive Board member Piero Cipollone. The Eurosystem plans changes to its T2S settlement platform in June 2027, while its work on tokenised finance includes accepting some DLT-issued assets as collateral and operating Pontes for settlement in central bank money.
Europe is scheduled to shorten the time for settling securities trades from two days to one on 11 October 2027, ECB Executive Board member Piero Cipollone said in a keynote address in Frankfurt. The move, known as T+1, is part of a wider effort to modernise European financial infrastructure, with preparations still under way and changes to the Eurosystem’s settlement platform planned before the migration.
In his 29 October address to an EU T+1 Industry Committee event, Cipollone said the shorter cycle means reducing the period between a trade and the buyer receiving the security while the seller is paid. He said a shorter settlement cycle can reduce market and counterparty risk, while requiring firms to improve and automate post-trade processes that had been built around the existing T+2 timetable.
The Eurosystem operates TARGET2-Securities (T2S), which settles securities in central bank money by enabling cash and securities to be exchanged simultaneously. Cipollone said T2S already handles substantial volumes at T+1 and T+0. Changes to its night-time settlement process are planned for June 2027, ahead of the October market migration.
Cipollone also connected the settlement change to the Eurosystem’s work on tokenised finance. He said that since 30 March, the Eurosystem has accepted certain marketable assets issued in central securities depositories using distributed ledger technology as eligible collateral for credit operations. Since 21 September, the Eurosystem’s Pontes service has enabled wholesale transactions in tokenised assets to settle in central bank money. The speech did not give further operational details about either development.
How T+1 Could Reshape European Markets
The shift is a change to the time allowed for completing securities transactions, but Cipollone argued that its effects reach beyond the settlement date. Firms will have less time to align cash, securities and operational processes after a trade. That makes standardisation and automation more pressing, particularly across a European market that he described as complex and fragmented.
If implementation works as planned, the shorter cycle could reduce the period in which parties face market and counterparty risk. Cipollone also said efficient post-trade infrastructure can make it easier for capital to move across borders and investors to access European markets. Those are stated objectives, not evidence in the speech that the change will by itself produce deeper markets or greater competitiveness.
The connection to tokenisation is also relevant: the ECB is preparing for a shorter timetable in existing systems while testing ways to settle transactions involving digital assets in central bank money. The developments point to two strands of infrastructure change, but the address does not say that tokenisation will replace T2S or form part of the T+1 migration.
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From T+2 to Digital Settlement
Under the current T+2 convention described by Cipollone, settlement follows a securities trade two days later. The planned T+1 date is 11 October 2027. The European Central Bank, the European Securities and Markets Authority and the European Commission support preparations, which are coordinated with market participants through the EU T+1 Industry Committee.
The speech places T+1 alongside other Eurosystem work, including wholesale payments, cross-border payments and the digital euro. On tokenisation, Cipollone said the Eurosystem is also examining whether and under what criteria DLT-based assets outside currently eligible settlement systems might qualify as collateral. He said the collateral framework must keep pace with innovation while meeting the requirement that collateral be adequate.
These are developments at different stages. T+1 has a stated migration date and a planned T2S process change; the possible eligibility of additional DLT-based collateral remains under assessment. Pontes, meanwhile, is already described as enabling wholesale settlement in central bank money for tokenised assets.
“T2S already supports shorter settlement cycles.”
— Piero Cipollone, ECB Executive Board member
Implementation Questions Still Open
The scheduled migration date and the planned June 2027 T2S change were stated by Cipollone, but the address does not provide a full implementation timetable, detailed testing milestones or a breakdown of which market participants still need to complete preparations. It also gives no estimate of the costs of adapting firms’ systems and workflows.
The speech does not quantify the expected reduction in risk or show how T+1 will affect settlement failures, liquidity needs or cross-border transactions in practice. Those outcomes will depend on implementation and market performance. The ECB’s review of whether additional DLT-based assets could become eligible collateral also remains open; the criteria and timing have not been set out in the supplied material.
Testing Before the 2027 Migration
The immediate focus is continued implementation and testing by market participants, the Eurosystem and other European authorities. The next dated technical step identified in the speech is the planned June 2027 adjustment to T2S’s night-time settlement process. The planned market migration follows on 11 October 2027.
Cipollone said the Eurosystem would continue working with market participants and European authorities to support a smooth change. The speech gives no further dates for T+1 testing or for decisions on the possible expansion of DLT-based collateral eligibility. Those details remain to be announced or clarified.
Key Questions
What does T+1 securities settlement mean?
T+1 means a securities trade is scheduled to settle one day after it is made, rather than two days later under T+2. Settlement involves the buyer receiving the security and the seller being paid.
When is Europe scheduled to move to T+1?
ECB Executive Board member Piero Cipollone said the planned migration date is 11 October 2027. Preparations and testing are continuing.
What is changing in T2S before the migration?
The Eurosystem plans changes to T2S’s night-time settlement process in June 2027. Cipollone said the platform already supports substantial volumes of T+1 and T+0 settlement.
How does tokenisation relate to the settlement change?
Cipollone described tokenisation as part of wider work to modernise financial infrastructure, not as a replacement for the T+1 programme. The Eurosystem has introduced Pontes for settling wholesale tokenised-asset transactions in central bank money and is assessing possible collateral eligibility for additional DLT-based assets.
Source: bis.org
