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Europe is scheduled to move from two-day to next-day securities settlement on Oct. 11, 2027. ECB Executive Board member Piero Cipollone says preparations include changes to the TARGET2-Securities platform, while the Eurosystem is also developing ways to settle tokenised assets in central bank money. Testing, implementation details and some future eligibility rules remain in progress.
Europe is scheduled to move securities trades to next-day settlement on Oct. 11, 2027, cutting the interval between a trade and the exchange of securities and payment from two days to one. In a keynote speech in Frankfurt on Oct. 29, European Central Bank Executive Board member Piero Cipollone said the change is part of a broader effort to modernise European financial infrastructure, including work on tokenised assets and settlement systems.
Cipollone said the transition from T+2 to T+1 is intended to reduce the time between a securities trade and its settlement. A shorter cycle can reduce market and counterparty risk, he said, but also requires firms to improve post-trade processes through more standardisation and automation. He described the timetable as a catalyst for modernisation rather than simply a technical adjustment.
The Eurosystem operates TARGET2-Securities (T2S), which settles securities in central bank money by allowing cash and securities to be exchanged simultaneously. Cipollone said T2S already handles substantial volumes on T+1 and T+0 timetables. Changes to its night-time settlement process are planned for June 2027, ahead of the broader market migration in October.
The speech also described the Eurosystem’s work on distributed ledger technology (DLT). Cipollone said that, since March 30, the Eurosystem has accepted certain marketable assets issued in DLT-based central securities depositories as eligible collateral for credit operations. He said the Eurosystem is assessing whether and under what criteria DLT-based assets outside currently eligible settlement systems might also qualify. Since Sept. 21, the Pontes service has enabled wholesale transactions in tokenised assets to settle in central bank money, according to the speech.
How T+1 Could Reshape Trading
Shortening the settlement cycle changes the operational timetable for investors, intermediaries and market infrastructure providers. Firms will need to complete the steps that follow a trade more quickly, making automation and coordinated processing more important. Cipollone said procedures that can be managed within a two-day cycle may be harder to sustain under T+1.
The ECB official linked more efficient post-trade infrastructure to Europe’s ability to support cross-border investment and more integrated capital markets. The change is also intended to keep Europe in step with other major markets as they shorten settlement times. Those are stated policy aims; the speech does not quantify how much the change will reduce costs, increase investment or improve competitiveness.
The tokenisation work has a separate but connected significance. Settling tokenised assets in central bank money brings an established form of settlement asset into new digital-market arrangements. The longer-term potential described by Cipollone is a shared digital environment for activities such as issuance, trading, settlement and custody. That remains a direction of development, not a claim that those functions have already been combined.
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From Settlement Reform to Tokenisation
The T+1 programme is being coordinated across a complex European market involving public authorities and private firms. Cipollone said the EU T+1 Industry Committee has helped coordinate preparations, with the ECB working alongside the European Securities and Markets Authority and the European Commission. He praised progress while warning that implementation and testing still need sustained cooperation.
The T+1 timetable sits within wider Eurosystem work on payments and market infrastructure. In his speech, Cipollone cited preparations for a digital euro, modernisation of wholesale payments and securities settlement, cross-border payments, and the use of DLT. He presented these as connected efforts to adapt Europe’s financial system, rather than as separate projects.
The speech records two recent steps on tokenised finance: the acceptance, from March 30, 2026, of certain DLT-issued assets as collateral, and the launch of Pontes settlement capability on Sept. 21, 2026. It does not provide transaction volumes for Pontes or specify a timetable for any broader extension of collateral eligibility.
“T2S already supports shorter settlement cycles.”
— Piero Cipollone, ECB Executive Board member
Remaining Tests and Eligibility Rules
The Oct. 11, 2027 migration date is the schedule set out in Cipollone’s speech, but the address does not report that the transition has been completed or that all implementation work is finished. It says testing and preparations must continue. The speech does not detail how individual firms will adapt their operations, nor does it identify specific readiness problems or costs.
The Eurosystem is still assessing whether DLT-based assets outside currently eligible settlement systems could qualify as collateral, and under what criteria. Cipollone said any framework would have to keep pace with innovation while meeting the ECB’s requirement that collateral be adequate. The speech does not specify a decision date, qualifying asset classes or the outcome of that assessment.
It also gives no figures for Pontes usage or a timetable for integrating the wider range of financial activities that tokenisation might support. The potential to bring issuance, trading, clearing, settlement, custody and asset servicing into a shared digital environment is presented as an opportunity, not as an already achieved result.
June Changes Before October Migration
The next identified infrastructure milestone is the planned June 2027 change to T2S night-time settlement. Cipollone said it is intended to help the platform and market operate under the tighter T+1 timetable. Firms and authorities are expected to continue implementation work and testing in the months before the migration.
The market-wide move is scheduled for Oct. 11, 2027. The Eurosystem says it will continue working with market participants and European authorities to support the transition. Separately, its assessment of possible collateral eligibility for additional DLT-based assets is ongoing; the speech sets no deadline for that work.
Key Questions
What does T+1 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 is when the buyer receives the securities and the seller receives payment.
When is Europe scheduled to move to T+1?
The date given by ECB Executive Board member Piero Cipollone is Oct. 11, 2027. His speech said preparations and testing remain underway.
What changes are planned for T2S before the move?
The Eurosystem plans changes to the T2S night-time settlement process in June 2027. Cipollone said the platform already handles substantial volumes on T+1 and T+0 cycles.
What is Pontes?
According to Cipollone’s speech, Pontes enables wholesale transactions in tokenised assets to settle in central bank money. It connects market DLT platforms with TARGET Services and has been operating since Sept. 21, 2026.
Will all DLT-based assets be accepted as ECB collateral?
No such decision was announced in the speech. The Eurosystem is assessing whether and under what criteria assets outside currently eligible settlement systems could qualify; the outcome and timing remain unspecified.
Source: bis.org
