Definition
T+1 refers to trade settlement on the business day following the trade execution day. US equities moved from T+2 to T+1 in May 2024, aligning with earlier adoption in several Asian markets. T+1 reduces counterparty credit exposure compared to T+2 but still introduces a settlement delay during which each counterparty bears risk. In digital assets, T+1 is less relevant than in equities because blockchain settlement operates on different timescales, but T+1 discipline is the traditional-market benchmark institutional counterparties understand.
Example
An institutional equity trade executes Monday; settlement (transfer of securities and cash) occurs Tuesday under T+1 rules. In digital assets, a comparable bilateral OTC trade might settle same-day (T+0) if wire transfers complete that day, or T+1 if wires settle overnight.
How Liquid Mercury Handles This
Mercury OTC supports bilateral settlement workflows that can align with T+1 discipline for institutional counterparties familiar with equity-style settlement timelines, with full audit trails through the settlement window.