The UK is inching its way towards 24/7 settlement, with the Bank of England issuing a consultation paper about bringing the CHAPS payment and RTGS accounting systems to near-continuous operations within the next five years.
However, the proposed changes are cautious, targeting 22×6 settlement rather than the 23.5×7 model adopted in the US.
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The BoE has already determined that CHAPS settlement will be open from 1:30 AM rather than 6 AM from September 2027.
Proposed further changes include settlements on Sundays and some UK bank holidays, expected to be implemented in 2029 or later, and 22 hour settlement windows, which would be introduced in 2031 or later. Although the BoE intends to make these amendments individually, “we would consider taking both steps together if consultation responses indicate demand for this”, it acknowledged.
“For the longer term, we are seeking views on 22×7 versus 23.5×7 as a potential ‘near 24×7’ long-term extension,” the consultation paper says. The BoE has outlined two possible options here: 22-hour settlement windows, and 23.5×7 CHAPS settlement.
In its paper, the BoE states that extending settlement hours could lead to better outcomes across the financial system, improved liquidity, and synchronisation with global systems. This would in turn improve the UK’s competitiveness, it notes.
“Extending settlement hours is an important part of delivering our vision of a safe and resilient multi-money ecosystem in which different forms of money – including central bank money, commercial bank money, tokenised deposits and stablecoins – can coexist and interoperate across both conventional and distributed ledger infrastructure,” the bank added.
Considering tokenised assets, the BoE has issued a “shared vision” with the FCA on tokenisation in the wholesale market, with the regulator stating that tokenisation “has the potential to streamline wholesale markets, making everything from issuing securities to managing assets faster and more efficient”.
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