BNY and Citadel Securities Pilot Tokenized Treasury Repo Deal

The transaction involved a 2-year Treasury note purchased by Citadel Securities via Tradeweb. Once executed, BNY recorded a digital representation of the security on its private ledger, allowing for near-instant settlement. Citadel Securities then pledged this tokenized asset as collateral for an overnight repurchase agreement, with BNY providing the necessary cash. This integration marks a shift in how institutional market participants manage the Treasury trade lifecycle, moving from execution to financing without the delays associated with the conventional T+1 settlement process.

Carolyn Weinberg, BNY’s chief innovation and market transformation officer, stated that the move aims to create a more connected and efficient financial system. While the bank did not disclose the specific financial terms of the deal, the project highlights a broader push by BNY to incorporate blockchain technology into its core asset servicing. The bank is currently preparing to expand its Treasury settlement operations into European and Asian trading hours next year, alongside plans to introduce tokenized deposit services and digital cash, further bridging the gap between traditional banking infrastructure and digital ledgers.