At Sibos 2025 in Frankfurt, Axiology’s CEO Marius Jurgilas and Board Member Jochen Metzger took the stage with moderator Martynas Pilkis to tackle a pressing question: do we really need instant, atomic settlement? The panel dived into how CBDCs, stablecoins, and DLT-based infrastructures could transform the way markets operate.
Metzger opened by pointing to long-standing frictions: “Settlement and settlement problems were part of my career at the Bundesbank, in particular settlement across different platforms or CSDs or across jurisdictions.” Referring to the limitations of current infrastructure, he added: “Here DLT cannot yet help and this is not only a technical issue, this is also a legal issue, this is about processing and definitions.”
T+0
On shortening settlement cycles, Pilkis, business development officer at Axiology Group, asked whether it makes sense to move from T+2 or T+1 to T+0. Metzger replied: “Yeah, this would be excellent because you take out lots of settlement risk and you free up liquidity, however getting there is not as easy as a walk in the park.” He suggested that, while equity markets dominate today’s debate, “the bond market and the repo market would be much more important.”
Jurgilas, brought in the perspective of retail-driven demand: “As someone very senior in this business once said: T+2 is not a limitation, it’s a business model. Of course, instant settlement requires liquidity, that can’t be ignored. But in retail, most transactions are already pre-funded. Just look at neobroker apps used by Gen Z and millennials: if you don’t have the money, you can’t submit the order. There’s no blockchain involved, it’s simply pre-funded settlement.”
Private vs public
Stablecoins versus CBDCs was another theme. Metzger comments: “There is a distinction between settlement with retail clients and wholesale markets. For wholesale markets, I think central bank money is much better and therefore, forgive me as ex-central banker I have to say this, I love CBDC. I love central bank money as a settlement asset and of course as long as CBDC is the digital euro, wholesale is not there, we need something else and here the bridge solution comes in.”
Jurgilas warned that private alternatives are pushing hard: “In a balanced way I believe that there is a competition, private versus public, and it’s good. Johan’s argument on loving CBDC, it’s not about being beautiful, it’s about being risk and being more resilient and structured, but if the same can be provided by private market participants in a much more efficient way, central banks would have a very difficult task to convince legislators that this is a better way.
Not black or white
Looking ahead, Metzger advised banks to prepare for parallel systems: The future is not black or white, there will be classic securities in the wholesale markets and there will be DLT tokenised securities and you need bridges in between, you need solutions that connect the classic world with the DLT world. I would prepare my processes to run both in a classic and in a DLT environment.” Jurgilas agreed that transitions will be complex: “It’s highly unlikely or impossible that there would be a big bang solution and everyone switches from one ecosystem into another.”
Sibos 2025 plays out in Frankfurt from 29 September to 2 October, with about 12,000 registered delegates. We are there, overview our coverage here.
