BNY, Citadel Securities test tokenized U.S. Treasuries to speed up Wall Street financing
The transaction shows how blockchain-based government bonds could help trading firms move collateral faster between settlement and financing.
BNY, the world’s largest custody bank, and trading giant Citadel Securities said Tuesday they had completed a transaction using tokenized U.S. Treasuries, showing how blockchain technology could help Wall Street move assets between trading and financing more quickly.
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.
The aim of the BNY-Citadel Securities transaction was to demonstrate how tokenized government bonds could move from settlement into financing, potentially allowing firms to reuse collateral sooner and free up cash for other trades.“Efficient movement of high-quality collateral is fundamental to well-functioning markets,” said Dan Doherty, digital assets operations lead at Citadel Securities, in a statement. He added that reducing delays across the trade lifecycle could improve how institutional markets operate.
BNY said it plans to introduce more digital cash and tokenized deposit capabilities to support blockchain-based settlement and financing.
Meanwhile, the bank said it expects to extend the operating hours of its traditional settlement systems for Federal Reserve-eligible securities and U.S. triparty transactions, aiming to reach European and Asian trading hours next year. Triparty transactions are a form of short-term financing in which a bank manages collateral between borrowers and lenders.
“By using a tokenized representation of a U.S. Treasury across both settlement and financing, we are enabling more connected, efficient and always-on financial system,” said Carolyn Weinberg, chief innovation and market transformation officer at BNY, in a statement.
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Asanat Analysis — Why it matters
BNY Mellon and Citadel Securities testing tokenized U.S. Treasuries signals institutional DeFi infrastructure moving from theoretical to operational. The use case—faster collateral movement between settlement and financing—addresses a real friction point: Treasury settlement currently takes T+1, creating lag in repo markets and financing chains. Tokenization eliminates that lag by enabling atomic settlement on blockchain rails, reducing counterparty risk windows and capital lockup.
This matters because it's the rare crypto experiment where traditional finance's operational constraints become the value driver, not speculation. If successful at scale, tokenized Treasuries could reshape how Wall Street manages liquidity—a multi-trillion-dollar market. It also de-risks the blockchain infrastructure narrative: rather than betting on new financial primitives, this tests whether existing assets move more efficiently on distributed ledgers. The involvement of both a custodial giant (BNY) and a major market maker (Citadel) suggests the test has real constraints and risk appetite behind it, not just PR.