Why 2026 Will Be a Defining Year for CSDs

By Koen Vanderhoydonk, Founder & CEO The Connector

Central Securities Depositories have long been among the least visible but most essential institutions in financial markets. They do not usually attract headlines, yet they sit at the heart of trust in the system: safeguarding securities, supporting settlement, and helping ensure that markets function with certainty and order. For many years, the priorities for CSDs were clear. Stability, efficiency and compliance formed the core agenda.

That is changing.

In 2026, CSDs are operating in a market environment where the rules of relevance are shifting. The pressure is no longer limited to maintaining resilient post-trade infrastructure. CSDs are now being challenged to respond to faster settlement expectations, rising cyber and operational risks, growing collateral pressures, and the emergence of tokenised assets and new settlement models. At the same time, they must navigate a world in which regions are moving at different speeds and with different priorities.

This makes 2026 more than just another year of incremental adjustment. It is becoming a defining moment for how CSDs position themselves in the next chapter of global market infrastructure.

The first and most immediate challenge is settlement acceleration. The move to shorter settlement cycles may sound technical, but its implications are strategic. A market can announce T+1, yet success depends on much more than reducing the number of days between trade and settlement. It requires the entire chain around settlement to become faster, cleaner and more predictable. Trade matching, allocations, securities lending, funding, FX processing and exception management all need to happen earlier and with less room for delay.

This is where the pressure on CSDs becomes very real. They do not control every part of that chain, but they are the place where weaknesses in the chain become visible. If the market is not ready, the symptoms appear in higher fail rates, increased friction and operational strain. In that sense, the T+1 discussion is not only about shortening the cycle.

It is about whether market participants are prepared to modernise the behaviours and processes that sit around the cycle. For CSDs, 2026 is the year in which preparation will matter far more than ambition.

The second challenge is resilience, and here the conversation has become much more serious. Cybersecurity used to be treated as one risk among many. Today, it is viewed as a direct threat to financial stability. For market infrastructures, the question is no longer whether they have controls in place. The question is whether they can continue operating under severe disruption and recover quickly enough when the unexpected happens.

This changes the tone at the board level. Resilience is no longer confined to the technology function. It touches governance, third-party dependencies, cloud strategies, access management and crisis response. A CSD outage is not an isolated operational issue; it can become a systemic event. That is why resilience in 2026 has moved from being a defensive topic to becoming part of strategic leadership. The institutions that are strongest here will not simply be those with the most controls, but those that can demonstrate discipline, clarity and recoverability under pressure.

A third challenge comes from collateral and liquidity. Financial markets are becoming more sensitive to how quickly assets can move when conditions tighten. Regulators and policymakers are paying closer attention to leverage outside the banking system, to stresses in repo markets, and to the channels through which liquidity problems spread.

This matters to CSDs because they are embedded in the movement of securities and collateral that supports the wider market.

Historically, many people viewed the CSD as a safe utility focused on recordkeeping and settlement finality. That perception is becoming too narrow. In today’s market, the ability to support efficient asset movement and reduce friction in times of stress is becoming more important. CSDs are increasingly being judged not only on their reliability, but also on the extent to which they can help markets remain fluid when funding and collateral needs intensify. This is a subtle but important shift in expectation.

The fourth challenge is perhaps the most strategic of all: digital assets and tokenisation. For years, much of the conversation around digital assets sat at the edge of mainstream finance. In 2026, that edge is moving closer to the center. Tokenised bonds, funds, collateral and other instruments are no longer theoretical pilots with no practical consequence. They are beginning to force a more fundamental question: if assets become digitally native, where does the role of the CSD begin and where does it end?

This should not be read as a threat of immediate disintermediation.

In fact, many tokenisation initiatives still depend heavily on the strengths that traditional market infrastructures provide: legal certainty, asset servicing, governance, trusted records and robust settlement frameworks. But the direction of travel matters. If CSDs do not define their role in tokenised markets, others may define it for them. The risk is not that CSDs disappear overnight. The risk is that they become less central over time, serving mainly as connectors between legacy systems and newer models built elsewhere.

Finally, there is the challenge of regional divergence. Global markets are becoming more connected, yet their infrastructures are not evolving in perfect harmony. North America has already made major progress on settlement acceleration. Europe is advancing, but through a more fragmented institutional landscape. Asia-Pacific is highly dynamic, though not uniform, with some markets pushing efficiency and others experimenting more aggressively with digital finance. For globally active firms, this creates a more complex operating environment. For CSDs, it creates a strategic puzzle: how to remain locally strong while also fitting into a market that increasingly expects cross-border coherence.

That may be the defining tension for 2026. CSDs must preserve trust, certainty and resilience at home, while also adapting to a market infrastructure landscape that is becoming faster, more digital and more fragmented at the same time.

The institutions that will stand out are unlikely to be the ones that simply defend their historic role. They will be the ones that understand that relevance in market infrastructure is now earned in a broader way. Safety remains non-negotiable, but safety alone is no longer enough. The CSD of the future will need to be resilient, interoperable, strategically open to tokenisation, and capable of supporting markets that demand both stability and speed.

That is why 2026 matters. It is not just a year of operational preparation. It is a year in which CSDs will show whether they are prepared to remain the quiet backbone of financial markets or whether they risk becoming a stable but less influential part of an infrastructure landscape being redesigned around them.