ECB Launches Consultation on 24/7 Settlement System Expansion

ECB Considers Expanding T2 Settlement Hours Amid Rise of Instant and Digital Payments

  • European Central Bank (ECB) began a public consultation to review and possibly extend settlement hours for its main payment system.
  • T2, the primary real-time gross settlement (RTGS) system, currently closes on weekends and only operates consumer and interbank payments during limited hours.
  • Emerging payment technologies like digital euro and blockchain-based (DLT) payments influence the review, though they are not the main reason for it.
  • Increasing use of instant payments and removal of transaction limits are key drivers behind the ECB’s review.
  • The consultation seeks feedback on options ranging from minor changes to full 24/7 availability, with input open through the end of September.

European Central Bank (ECB) has launched a public consultation on whether to extend the operating hours of its main real-time payments system, T2. The initiative was announced Friday as the ECB considers how best to serve new payment needs in Europe.

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T2 currently runs for about 22.5 hours each day, but is fully closed for 48 hours over weekends. At present, banks and consumers can process payments only within a more limited daily window. The ECB is not proposing specific changes yet, preferring to gather input from market participants on possible adjustments, up to and including 24/7/365 operation.

The ECB explained that while new digital trends, including distributed ledger technology (DLT) payments and the digital euro, matter for the review, the primary reason is the rise of instant payments. The ECB highlighted that TIPS, its instant payment system already operating round the clock, will likely process far higher volumes after the Instant Payment Regulation is enforced. The cap on instant payments of 100,000 euros (about $108,000) will also be lifted, which could force banks to keep higher liquidity buffers.

The ECB stated, "The consultation will consider several options, ranging from small modifications to a 365-day operational year." The bank also noted that as blockchain-based payment systems are designed for 24/7 operations, current limits on central bank money settlement could disrupt DLT transactions or force institutions to hold more funds, which is not ideal.

International factors are also part of the ECB’s review. Many non-euro area institutions already use T2 during overnight hours—most payments from abroad occur between 3 a.m. and 5 a.m. The ECB sees potential benefits in expanding access, especially for future digital euro users outside Europe.

In recent years, the Eurosystem tested DLT settlement with central bank money and worked on a "Trigger" solution, which starts a payment in T2 to settle DLT transactions. Both digital euro and DLT payment trials underline the need for longer settlement windows.

The ECB will gather responses from the public and stakeholders until the end of September. The central bank said any timeline for next steps will depend on this feedback, with no immediate schedule for implementation.

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