ChainCatcher report: BNY Mellon and Citadel Securities have completed a triparty repurchase transaction using tokenized U.S. Treasuries. Citadel Securities purchased a two-year U.S. Treasury via BNY Mellon on Tradeweb; BNY Mellon recorded the tokenized version of the bond on its private digital ledger and settled the transaction within minutes, instead of the traditional T+1 timeline. Subsequently, Citadel used the tokenized Treasury as collateral to obtain cash from BNY Mellon in an overnight triparty repo transaction. BNY Mellon stated this marks the first use of tokenized assets on a major triparty repo platform. Carolyn Weinberg, Head of Innovation and Market Transformation at the bank, said that using tokenized U.S. Treasuries for both settlement and financing helps create a more connected, efficient, and 24/7 financial system. The bank also plans to add digital cash and tokenized deposit capabilities for institutional settlement and financing, and intends to extend the operational hours of its settlement platform to include European and Asian trading sessions next year.
BNY Completes First Tokenized Treasury Repo on a Major Platform with Citadel Securities
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Summary
BNY Mellon and Citadel Securities executed a tri-party repo using a tokenized U.S. Treasury, marking the first such transaction on a major platform. Citadel Securities purchased a 2-year Treasury through BNY on Tradeweb, which recorded the tokenized version on its private ledger and settled within minutes. The tokenized asset served as collateral for an overnight repo. BNY aims to expand its digital cash and tokenized deposit capabilities, with plans to support trading during European and Asian sessions. This initiative aligns with efforts to enhance CFT (Countering the Financing of Terrorism) compliance for risk-on assets.
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