24/7 financial rails: How BNY plans to eliminate the weekend lag in U.S. Treasuries
BNY is testing the use of tokenized U.S. Treasuries on a private blockchain to facilitate 24/7 settlement. This initiative aims to eliminate weekend lags in traditional financial markets by leveraging stablecoin reserve management.
Why it matters
Integrating blockchain technology into traditional Treasury settlement could significantly improve liquidity and efficiency in global financial markets.
The bank will test tokenized Treasuries on a private blockchain by the end of the year and will extend its existing settlement network later this year to cover more of the Asian, European and U.S. trading days, according to a letter sent to clients reported by Bloomberg .
The earlier transaction involved Ripple’s RLUSD and OpenEden’s USDO with Ripple participating directly, while BNY’s cash-management business unit Dreyfus acted for OpenEden.
Tradeweb handled the trade after Fedwire Securities had stopped processing secondary-market Treasury transfers for the day, according to the report.
BNY said the transaction settled shortly afterward through existing cash rails. The securities were not tokenized, but the test instead showed that Treasury activity tied to stablecoin reserves could continue after the main U.S. settlement window closed.
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