BNY, Citadel Securities test tokenized U.S. Treasuries to speed up Wall Street financing
BNY and Citadel Securities have successfully tested the use of tokenized U.S. Treasuries to streamline collateral management and financing. The initiative aims to reduce settlement times and improve capital efficiency by leveraging blockchain technology for traditional financial assets.
Why it matters
This represents a significant step in the institutional adoption of blockchain technology to modernize Wall Street's back-office operations and liquidity management.
The transfer focused on collateral, a key part of financial markets. Banks and trading firms use U.S. government bonds to secure short-term loans and fund trading activity. Moving those bonds between accounts and settlement systems can take time, tying up assets that could otherwise be put to work.
The effort comes as Wall Street explores bringing traditional assets onto blockchains. Firms including BlackRock, Franklin Templeton and JPMorgan have embraced tokenized funds and securities, betting the technology can shorten settlement times, automate processes and make assets easier to move.
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