BNY, Citadel Securities complete tokenized Treasury transaction with near-instant settlement

BNY and Citadel Securities have completed a triparty repurchase agreement workflow using a tokenized US Treasury, marking the first time tokenized assets have been used on a major triparty repo platform.

According to a Tuesday press release, Citadel Securities purchased a two-year US Treasury note through BNY on Tradeweb, after which a tokenized representation of the security was recorded on BNY’s private digital ledger and settled within minutes.

The firm then used the tokenized Treasury as collateral in an overnight triparty repo, receiving cash from BNY. The process bypassed the standard T+1 settlement cycle for the tokenized security.

The transaction illustrates how tokenized assets can be integrated into institutional markets beyond issuance and settlement, extending into collateral management and short-term financing, according to the companies.

BNY said the workflow could improve the movement of high-quality collateral and give market participants faster access to liquidity.

BNY plans to expand its digital asset services by introducing additional digital cash and tokenized deposit capabilities for institutional settlement and financing. It also aims to extend the operating hours of its traditional settlement platforms for Fed-eligible securities and US triparty transactions, with European and Asian trading hours targeted for 2027.

The company expects tokenization and longer operating hours to support increasingly continuous markets, improving programmability, transparency and settlement predictability.

BNY’s separate road to tokenized Treasuries

BNY plans to pilot tokenized US Treasuries on its private blockchain by the end of 2026 and is targeting 24/7 settlement for both conventional and tokenized Treasuries in 2027.

Earlier this year, the firm completed an after-hours Treasury transaction involving stablecoin issuers Ripple and OpenEden.