TARGET2-Securities, which was launched by the European Central Bank to end fragmentation and lower the cost of cross-border settlements in the eurozone, has added Danish kroner to become a multi-currency settlement system.

The ECB said in a statement that Danish kroner can now be settled on the pan-European platform as Danmarks Nationalbank successfully connected its real-time gross settlement system, Kronos2, to T2S over the weekend.

#T2S goes multi-currency and expands with new participants.
As of today, securities transactions in Danish kroner can be settled on the pan-European platform.https://t.co/40Z2xqYQhl pic.twitter.com/PXIPN8Nlte

— TARGET Services (@TARGET_ECB) October 29, 2018

“The Danish kroner connection is a landmark for T2S as it marks the first time that a currency other than the euro is available for delivery-versus-payment settlement,” added the ECB. “To foster European integration, T2S has been designed as a multi-currency platform, which means it can accommodate more currencies if there is interest from other non-euro area central banks.”

Danmarks Nationalbank said in a statement that T2S allows both small and large investors to hold portfolios of securities issued in different EU member states.

“T2S can contribute to cheaper and more efficient settlement of European securities across borders and national infrastructures,” added Danmarks Nationalbank.

The European central bank launched T2S in 2008 to end fragmentation and lower the cost of cross-border settlements. T2S began operating in 2015 and the final wave of central securities depositories migrated to the platform in September last year. Over the last two years 22 central securities depositories in 20 markets have migrated to T2S in five waves.

VP Securities, Denmark’s central securities depository, which already uses T2S for euro settlement has now migrated its Danish kroner settlement to the platform. The Danish CSD said in a statement that the first Danish kroner took place on T2S on Saturday 27 October.

“This not only marks a major milestone in the migration, but also proves that T2S is a true multi-currency system – since DKK is the first non-EUR currency to be settled on the platform,” added VP Securities.

EuroCCP, the pan-European central counterparty based in Amsterdam, said in a statement that it is now a directly connected party to the T2S platform for VP Securities.

“This is another important milestone which demonstrates EuroCCP’s commitment to providing its clients with the most efficient access to local markets, which improves settlement efficiency,” added EuroCCP. “EuroCCP will continue to support direct access to  local markets and has committed to join future T2S migrations as they arise.”

The European Central Bank said in February this year that a lot of work is still needed to fully integrate the post-trade marketplace in the region despite the completion of the migration of central securities depositories to T2S.

The eighth T2S Harmonisation Progress Report from the ECB’S advisory group on market infrastructures for securities and collateral said the platform provides a solid basis for European post-trade harmonisation, which will become even more important in the context of the Capital Markets Union initiative for the region.

However, the advisory group also warned that a lot of work remains to achieve a fully integrated post-trade marketplace in Europe.

“In particular, further efforts are required from public authorities and market stakeholders in the areas of corporate actions, legal harmonisation, withholding tax and cross-border shareholder registration,” added the report.

The advisory group is also working on increasing harmonisation for collateral management practices in post-trade.