BNY and Citadel Securities test tokenized Treasuries in repo transaction

BNY and Citadel Securities have completed a transaction using tokenized U.S. Treasuries to test how blockchain technology can speed up financial collateral settlement, according to CoinDesk, BigGo Finance, and Traders Union. The Defiant reported that the transaction involved a two-year note that settled within minutes on the private digital ledger of BNY before Citadel Securities used the asset to raise cash in an overnight repo transaction. [1][3][7][8][9]

Financial institutions use U.S. government bonds as collateral to secure short-term loans and support active trading, as CoinDesk reported. Transferring government debt between settlement systems and commercial accounts can delay capital deployment. United States Treasury securities are debt instruments issued by the United States Department of the Treasury to fund government operations. [1][11]

The transaction forms part of a broader institutional push into asset tokenization. CoinDesk Tech Security reported that asset manager Federated Hermes plans to issue its first tokenized fund shares early next year in partnership with digital securities infrastructure provider Prometheum. In addition, the International Monetary Fund reported in its October Global Financial Stability Report that more than half of sampled tokenized U.S. stock trading took place outside regular U.S. market hours, according to CryptoSlate. [2][4]

The latest pilot reflects ongoing testing of blockchain infrastructure for institutional financing. Institutional interest in bringing real-world assets onto distributed ledgers has increased as firms seek continuous settlement processing, as FTMQ Crypto reported earlier. [1][14]