Citi Report Shows T+1 and Digital Asset Adoption Having Most Post-Trade Impact

The impact of T+1, cutting the settlement cycle to the day after a trade, and the increasing adoption of digital assets are having the most significant impact on the post-trade environment, according to a story in MarketsMedia news. Citi’s latest Securities Services Evolution whitepaper found that 41% of respondents see T+1 as the most impactful market change, up from 32% last year. The bank surveyed 537 market participants from buy- and sell-side firms. “As more markets have either confirmed or have indicated a timeframe to move to T+1 in the next four to five years, buoyed by the success of the 2024 migrations, global workloads are spiraling,” added Citi. The paper said the cumulative workload of T+1 is larger than ever this year with three quarters, 76%, of respondents actively working on T+1 initiatives, especially among asset managers. The U.S and Canada moved to T+1 in May 2024 but nearly half, 48%, of respondents to the survey are still running projects to optimize their internal processes for North American settlements. Citi said: “The impact of T+1 clearly extends well past implementation date. With levels of activity highest outside of the U.S., the effects of 2024’s transitions are still being managed by global firms across different time-zones and currencies.” Digital assets and tokenized securities are expected to make up 10% of market turnover by 2030 according to the paper. Bank-issued stablecoins were identified as the main enabler to support collateral efficiency, fund tokenization and private market securities.