Wall Street restores 100-year-old stock settlement system

Wall Street announced that it will shorten the settlement time of stock transactions from the current "T+2" to "T+1". This change symbolizes a major shift in the settlement system of the US financial market.

This move by Wall Street has attracted widespread attention and discussion in the market. Investors and financial institutions generally believe that shortening settlement times will help improve market liquidity and transparency, while reducing risks caused by market fluctuations. However, what does this change mean for the cryptocurrency market?

Source: Bloomberg

Historical background and changes in T+1 settlement

Settlement time for stock trades, the interval from the trade date to the settlement date, has always been an important part of the functioning of financial markets. Over the past century, the U.S. stock market has experienced multiple settlement time adjustments, gradually shortening from the initial "T+5" to "T+2". This return to "T+1" is an important change in the 100-year settlement system.

Source: Finance Magnates

This change is driven by technological advancement and market demand. With the popularity of electronic trading systems and the increase in transaction speed, the market has higher demand for faster settlement times. The T+1 settlement system will allow transactions to be completed faster, reducing the number of unsettled transactions, thereby reducing market risk.

In addition, the T+1 settlement system will increase market transparency and efficiency. By shortening settlement times, investors can obtain transaction funds faster, thereby improving market liquidity and stability. This change is an important advancement for market participants.

Improve market efficiency? What impact will it have on cryptocurrencies?

Changes to Wall Street’s settlement system will also have a certain impact on the cryptocurrency market. Notably, several crypto stocks will benefit from the new settlement plan, including Coinbase, MicroStrategy, Hut 8, and Marathon Digital. The delays typically seen in settling trades will be significantly reduced, allowing investors to complete trades within 24 hours. This could further increase the stock's exposure to the sector.

According to the analysis of "CoinGape", the implementation of the T+1 settlement system will have the following impacts on the cryptocurrency market:

Increase market competitiveness

First of all, the implementation of the T+1 settlement system will promote the efficiency of traditional financial markets, which is a competitive pressure for the cryptocurrency market. Cryptocurrency exchanges have always attracted a large number of investors with their efficient trading and settlement systems as a selling point. However, as settlement time in traditional financial markets shortens, investors may reconsider their capital allocation, thereby increasing market competitiveness.

Promote technological innovation

Secondly, this change on Wall Street may prompt further technological innovation in the cryptocurrency market. In order to maintain a competitive advantage in the market, cryptocurrency exchanges and related technology companies will need to continuously improve their trading and settlement systems and provide faster and more secure trading services. This will promote technological progress and market development of the entire cryptocurrency industry.

Improve market transparency

Finally, the implementation of the T+1 settlement system will help improve transparency and compliance in the market. The cryptocurrency market has always faced regulatory challenges and market trust issues. The improvement of the traditional financial market settlement system will provide reference and reference for the cryptocurrency market. By learning from the successful experiences of traditional financial markets, the cryptocurrency market can further improve its transparency and compliance, thereby enhancing market confidence and attracting more investors.

In summary, the change of Wall Street settlement time to T+1 is an important market change. This move will not only improve the efficiency and transparency of the traditional financial market, but will also have a profound impact on the cryptocurrency market. As market competition intensifies and technological innovation is promoted, we look forward to seeing more development opportunities and challenges in the cryptocurrency market in the future.