T plus One, or T+1, refers to a settlement cycle where a trade is completed one business day after the transaction date. This means that the ownership of securities and funds officially transfers between buyer and seller within a single day following the trade execution. It represents a reduction from the previous T+2 or T+3 settlement periods, aiming to decrease market risk and increase capital efficiency.
Context
The move to T+1 settlement in traditional financial markets is a significant development frequently reported in financial news, including its potential implications for digital assets. While blockchain transactions inherently offer near-instantaneous settlement, the T+1 shift in conventional markets narrows the gap, influencing how digital asset exchanges and custodians might integrate with legacy systems. This change aims to align traditional market speeds more closely with the efficiency often found in decentralized finance.
Implementing a shared ledger for securities lending establishes a single, auditable "golden record," critically de-risking the post-trade lifecycle for the $4 trillion monthly market.
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