BNY and Citadel Securities Test Tokenized Treasuries to Speed Up Wall Street Financing

BNY and Citadel Securities completed a transaction using tokenized US Treasuries, showing how blockchain technology could help Wall Street move assets between trading and financing faster. The test centered on collateral, which banks and trading firms use to secure short term loans and fund trading activity.

The aim was to show that tokenized bonds can go from settlement into financing, letting firms reuse collateral sooner and free up cash for other trades. Dan Doherty, digital assets operations lead at Citadel Securities, said efficient movement of high quality collateral is fundamental to well functioning markets, and that fewer delays across the trade lifecycle could improve institutional markets.

BNY Plans for Digital Cash and Settlement Hours

BNY said it plans to add more digital cash and tokenized deposit capabilities to support blockchain based settlement and financing. It also expects to extend operating hours for its traditional settlement systems for Federal Reserve eligible securities and US triparty transactions, aiming to cover European and Asian trading hours next year.

Triparty transactions are short term financing deals where a bank manages collateral between borrowers and lenders. Carolyn Weinberg, chief innovation and market transformation officer at BNY, said a tokenized Treasury across settlement and financing enables a more connected, efficient and always on financial system.

Wall Street Embraces Tokenized Assets

The test comes as BlackRock, Franklin Templeton and JPMorgan back tokenized funds and securities, betting the technology can shorten settlement times, automate processes and make