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BNY and Citadel Securities have completed the first tokenized Treasury financing transaction on a major U.S. triparty repo platform, marking a new development in institutional blockchain settlement.
The transaction involved a two-year U.S. Treasury note that Citadel Securities purchased through BNY on Tradeweb. A digital version of the security settled within minutes on BNY's private ledger.
Citadel Securities then pledged the tokenized Treasury as collateral for an overnight repurchase agreement, while BNY provided the cash. The deal combined securities trading, settlement, and short-term financing without following the standard next-business-day settlement process. BNY described it as the first use of tokenized assets on a major triparty repo platform.
Citadel Securities began the transaction by purchasing a two-year Treasury note through Tradeweb, an electronic marketplace serving institutional investors. Following the trade, BNY created a digital representation of the security on its private ledger. The bank completed settlement within minutes instead of the conventional T+1 cycle.
Citadel Securities subsequently used the tokenized asset to secure overnight financing from BNY. The arrangement allowed the security to move directly from settlement into collateral financing.
In a triparty repo, a third-party agent manages collateral and settlement services between the borrower and lender. BNY provided that infrastructure alongside the financing.
The bank did not disclose the transaction's value, interest rate, or cash amount.
Carolyn Weinberg, BNY's chief innovation and market transformation officer, linked the transaction to the bank's development of more connected financial infrastructure.
Meanwhile, Citadel Securities executive Dan Doherty identified efficient collateral movement as essential for financial markets.
The transaction raised a central question: Could tokenized Treasury collateral help institutions access short-term financing without conventional settlement delays?
BNY's transaction follows several institutional efforts to bring government securities and collateral financing onto blockchain networks.
In August, Virtu Financial, M1X Global, and Tradeweb completed a sovereign bond repo using the Canton Network. That transaction involved USDM1, a digital sovereign bond backed by short-term U.S. Treasuries. Its complete repo and repurchase cycle settled in under ten minutes.
Unlike BNY's private-ledger transaction, the Canton Network processed securities delivery, cash transfers, and repurchase operations within its blockchain infrastructure.
Institutional interest has also expanded beyond individual deals. A September Citi report found that 77% of surveyed institutions were considering tokenized collateral.
The report identified real-time margin and cross-border Treasury transfers as potential applications. Meanwhile, DTCC has tested tokenized securities transactions with more than 30 financial and technology companies, including Citadel Securities.
Its July production activity covered Treasury repo, collateral pledges, securities lending, and settlement. DTCC planned an October 2026 rollout following December 2025 regulatory clearance.
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BNY now plans to expand its digital cash infrastructure alongside conventional securities settlement operations. The bank intends to introduce additional tokenized deposit capabilities for institutional clients. These services would support cash movements through blockchain infrastructure while maintaining traditional banking records.
Its January deposit tokenization initiative included Citadel Securities, Intercontinental Exchange, DRW, and Circle among participating institutions. Separately, BNY plans to extend settlement hours for Federal Reserve-eligible securities and U.S. triparty transactions.
The bank aims to make these services available during European and Asian trading hours next year. Laide Majiyagbe, BNY's global head of markets, linked the initiative to institutions' need for timely securities and collateral access.
BNY has also outlined plans for programmable settlement and improved collateral movement in a separate Treasury market infrastructure paper.
BNY and Citadel Securities demonstrated how tokenized Treasuries can support rapid settlement and overnight financing through established triparty infrastructure. The transaction connected digital securities with traditional collateral services. Meanwhile, BNY's planned digital cash products and longer settlement hours could expand instituti
