On Friday the European Central Bank launched a consultation on extending the hours of T2, its main real time gross settlement (RTGS) system. DLT payments and the digital euro are one of the considerations, although not the primary driver of the plans.
T2 already operates 22.5 hours a day, but consumer and interbank payments are only possible during a narrower window. Additionally, the system closes for 48 hours over the weekend. The consultation is canvassing what changes are desirable, varying from smaller tweaks to 24/7/365. Currently the central bank wants to have a dialogue rather than proposing specific changes or any timeframe for implementation.
These timing constraints become particularly relevant when considering emerging payment technologies. Last year the Eurosystem ran DLT wholesale settlement trials using central bank money and now the ECB is working on an interim Trigger solution and a CBDC longer term. The Trigger solution initiates conventional T2 payments for the settlement of DLT transactions. Given the expectation that DLT systems are expected to operate 24/7, longer central bank money settlement times are desirable. Otherwise Trigger payments may not be possible during certain hours, or in the case of CBDC, institutions would have to keep extra buffers which is undesirable.
Article continues …
Want the full story? Pro subscribers get complete articles, exclusive industry analysis, and early access to legislative updates that keep you ahead of the competition. Join the professionals who are choosing deeper insights over surface level news.
