Key takeaways

• BNY, a global financial services company, completed a triparty repo workflow with Citadel Securities using a tokenized representation of a U.S. Treasury, marking the first use of tokenized assets on a major triparty repo platform.
• In the transaction, a 2-year U.S. Treasury note was purchased and represented on BNY’s private digital ledger as a tokenized security, settling near-instantly rather than on the standard T+1 settlement cycle, before being used as collateral in an overnight triparty repo.
• The transaction shows how tokenized U.S. Treasuries can move through institutional market activity, from trade execution and settlement to short-term financing, in a connected digital workflow.
• Reflecting BNY’s role in the U.S. Treasury market as a leading settlement agent and collateral manager, this is a meaningful step toward improved mobility and faster access to liquidity in one of the world’s deepest and most liquid markets.

What happened

• Citadel Securities purchased a 2-year U.S. Treasury note through BNY on Tradeweb. Following execution, a tokenized representation of the security was recorded on BNY’s private digital ledger and settled within minutes.
• After settlement, Citadel Securities used the tokenized Treasury as collateral in an overnight triparty repo, a short-term financing transaction, with BNY providing cash in return.

Why it matters

• As market participants seek faster and more efficient ways to move collateral, tokenized U.S. Treasuries can support greater speed, transparency and operational efficiency across markets.
• This transaction demonstrates how tokenized assets can move beyond issuance and settlement into core collateral and financing workflows, supporting BNY’s broader strategy to connect traditional market infrastructure with digital markets operating on extended timelines.

What they’re saying

• Carolyn Weinberg, Chief Innovation & Market Transformation Officer at BNY, said: “This transaction demonstrates what becomes possible when tokenized assets are used in institutional workflows. By using a tokenized representation of a U.S. Treasury across both settlement and financing, we are enabling more connected, efficient and always-on financial system.”
• Brian Ruane, Global Head of Clearance and Collateral Management, Credit Services and Corporate Trust at BNY, said: “As Treasury market activity becomes more continuous, the infrastructure supporting liquidity, funding and collateral has to keep pace. This transaction shows how tokenized collateral can help reduce friction while still using the trusted market structure participants rely on.”
• Laide Majiyagbe, Global Head of Markets at BNY, said: “As global markets move faster, having the right asset, in the right place, at the right time is critical for our clients. We are excited to work with Citadel Securities to leverage our trusted end-to-end ecosystem at BNY to achieve this objective for our clients. This trade is a real example of how tokenization solves for client needs, leveraging both digital rails and traditional infrastructure.”
• Dan Doherty, Digital Assets Operations Lead at Citadel Securities, said: “Efficient movement of high-quality collateral is fundamental to well-functioning markets. We’re pleased to work with BNY on a practical use case that shows how tokenized U.S. Treasuries can move from settlement into financing more efficiently. By reducing friction across the trade lifecycle, innovations like this have the potential to improve how institutional markets operate.”

What’s next

• BNY plans to introduce additional digital cash and tokenized deposit capabilities designed to support more efficient on-chain settlement and financing activity for institutional clients.
• BNY expects to extend operating hours for its traditional settlement platforms for Fed-eligible securities and U.S. triparty transactions, with a view to extend into European and Asian trading hours next year.
• To support 24/7 markets, BNY sees tokenization and extended operating hours evolving together to support greater programmability, transparency and more predictable settlement outcomes. To learn more, read BNY Institute’s latest paper here: https://www.bny.com/corporate/global/en/institute/next-us-treasury-market-evolution.html

Source: BNY