Thread by @quant_network

Highlights from 'Is T+1 the goal or a step to instant securities settlement?'...a 🧵

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"Reducing the settlement cycle is all about reducing counterparty risk," says Romhanyi. "Getting to T+1 will reduce a CCP's margin by 41%."

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"We're talking about T+1 today because finally the technology can actually do it," says Grimonpont.

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"The industry has to say to what degree this is really beneficial to them," says Hernani.

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"If [T+1] is more than five years away, why don't we do it on fully digital?" asks Hernani. "Invest in the next technology, not the existing one. That could take us to T+0."

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More than half the audience expects T+1 to be achieved within three years. 37% say four to five years. Only 3% say it will take more than five years.

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"Everything is instant now," says Hernani. "We're sitting here in a 'legacy' industry. What happens if the next asset class is traded outside today's channels? We either make technology a friend or compete against other industries and assets."

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"Either we adapt or we'll be confronted with people who want to invest in something that is 'instant'," says Hernani. "It's not a plumbing thing; it's going to happen."

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A lot of the audience are asking about CBDCs, says O'Shea. What can we do?"

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"If we want to go digital, we need CBDCs," says Hernani. "Nobody wants to settle in Bitcoin. It's unavoidable that we'll get digital currencies from the central banks. It's going to happen and it's good for the system."

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The audience is split. 39% say netted T+0 is the preferred settlement cycle; another 39% want T+0 or real-time.

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