Huoxing Finance reports that on October 14, BNY Mellon and Citadel Securities 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 obtained cash from BNY Mellon by pledging the tokenized Treasury as collateral in an overnight triparty repo transaction. BNY Mellon stated this was 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 Mellon and Citadel Securities Complete the First Tokenized Treasury Repo on a Major Platform
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Summary
BNY Mellon and Citadel Securities executed the first tokenized Treasury repo on a major tri-party platform, using risk-on assets in the process. Citadel purchased a 2-year U.S. Treasury via Tradeweb, with BNY Mellon tokenizing the asset on its private ledger and settling the trade within minutes. The tokenized security was then used as collateral for an overnight cash loan. BNY Mellon described it as a milestone in the securities versus commodities debate, highlighting the potential for digital cash and tokenized deposits. The bank plans to extend trading hours to include European and Asian sessions by next year.
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