Future Trends in FX Settlement and Operations

This document is a report discussing future trends in foreign exchange (FX) settlement and back-office operations, with a particular focus on T+1 settlement cycles and the growth of emerging currencies. It outlines the anticipated changes in settlement cycles following the US and Canadian transitions, indicating that the EU and UK are set to implement T+1 securities settlement by October 2027, with an expected negligible impact on overall settlement. The report emphasizes the need for market participants to prepare early, automate processes, and align their operations with custodian cut-off times to mitigate operational risks. Additionally, the document covers the increasing discussions around same-day settlement and the related liquidity impacts, as well as the role of central bank digital currencies (CBDCs) and stablecoins in the wholesale FX market. It highlights the challenges that these digital currencies face regarding mainstream adoption within the FX space. The report provides statistical insights from the 2025 BIS Triennial Survey, showcasing trends and shifts in FX market dynamics.