Europe will halve the time needed to complete securities trades to one day on Oct. 11, 2027, from two days, the European Central Bank’s Piero Cipollone said in a speech published Oct. 29.
The change could reduce trading risks and force improvements in how Europe processes transactions, Cipollone said. The ECB published his speech under the title “Piero Cipollone: Next-day securities settlement, tokenisation and the transformation of Europe’s financial infrastructure”.
Cipollone set out preparations for the shorter settlement cycle and plans for digital financial infrastructure through 2028. His speech provided no numerical estimates of the expected benefits or empirical study covering a specified period.
The move to next-day settlement, known as T+1, will shorten the interval before buyers receive securities and sellers receive payment. Cipollone said processes that worked with two days to complete transactions would become harder to sustain with one.
He said the transition would require more consistent procedures and greater automation across markets. More efficient processing after trades would help money move across borders and make European markets easier for investors to access, he said.
The Eurosystem’s TARGET2-Securities platform, which exchanges cash and securities simultaneously using central bank money, already handles next-day and same-day settlement, Cipollone said. Changes to its night-time processing are planned for June 2027, ahead of the October switch.
Cipollone said tokenisation, which represents financial assets as digital tokens, could bring trading and other services into a shared digital environment. The technology could simplify financial infrastructure as well as enable near-instant securities transfers, he said.
The Eurosystem began accepting eligible marketable assets issued through securities depositories using distributed ledger technology as collateral on March 30, Cipollone said. It is assessing whether assets outside currently eligible settlement systems could also qualify, while maintaining its requirement for adequate collateral.
Pontes has allowed transactions in tokenised assets to settle in central bank money since Sept. 21, he said. The service connects market platforms using distributed ledger technology with the Eurosystem’s TARGET Services.
The Eurosystem plans to extend Pontes operating hours by mid-2027 and make it available around the clock throughout the year in 2028, Cipollone said. It also plans to make settlements immediately final on its distributed ledger platform as early as 2027.
Appia aims to produce a blueprint for an integrated European tokenised financial system by 2028, he said. A public consultation showed broad market support and willingness to participate, supporting development of the project as a partnership between public authorities and businesses.
Cipollone said existing infrastructure would continue alongside new platforms because different technologies suit different tasks. He said the systems needed to work together, preserve settlement in central bank money and prevent new digital divisions from reproducing Europe’s fragmented markets.
