BNY Completes Tokenized Treasury Repo With Citadel Securities, Enabling Settlement in Minutes
Bank of New York Mellon (BNY) has completed its first triparty repurchase agreement using tokenized U.S. Treasury collateral on a major triparty platform, working with Citadel Securities in a transaction designed to accelerate securities settlement and overnight financing. The deal used BNY's private ledger to reduce settlement time to minutes, compared with the traditional T+1 process.
The transaction highlights how tokenized securities could improve the movement of collateral between settlement and financing. However, the broader impact will depend on whether similar systems can operate across different platforms, markets and forms of digital cash.
How BNY and Citadel Securities Executed the Tokenized Repo
Citadel Securities purchased a two-year U.S. Treasury note through BNY on the Tradeweb platform. A tokenized representation of the note was then recorded on BNY's private ledger, allowing settlement to be completed within minutes rather than the usual T+1 timeframe.
Citadel Securities subsequently used the tokenized Treasury as collateral for an overnight triparty repo transaction, obtaining cash from BNY.
Citadel Securities' Dan Doherty described the transaction as “a practical use case that shows how tokenized U.S. Treasuries can move from settlement into financing more efficiently.” BNY's Carolyn Weinberg highlighted its application “across both settlement and financing.”
The significance of the deal lies in bringing tokenized repo activity onto a major triparty platform. Tokenized repurchase agreements already existed, but the transaction demonstrated a way to connect tokenized collateral with established financial market infrastructure.
Broadridge Shows Tokenized Repo Is Already Operating at Scale
BNY's transaction was not the first large-scale use of tokenized repo. Broadridge reported processing $7.5 trillion in repo transactions during September 2026, with an average daily trading value of $359 billion through its own distributed-ledger repo platform.
The scale of the existing market helps explain the interest in faster settlement. The global repo market handles more than $10 trillion in daily volume, while conventional settlement periods such as T+1 and T+2 can delay the movement of securities and cash. Margin adjustments are also commonly processed in batches.
Callan summarized the underlying problem by writing, “Timing is the root issue.” Tokenization could help collateral move more quickly, potentially reducing delays in financing transactions. However, one BNY transaction alone does not establish that these benefits can be delivered consistently across the wider market.
BNY Plans to Expand Operations Into Europe and Asia
BNY aims to expand its Federal Reserve-eligible payment settlement methods and triparty operations into Europe and Asia in 2027. The bank is also developing digital cash capabilities.
Longer operating hours could support international funding across time zones, provided cash and collateral can move together. Faster securities settlement alone is insufficient if the cash needed to complete a transaction cannot be transferred at the same speed.
The potential market is substantial. According to the International Capital Market Association (ICMA), outstanding European repo agreements totaled approximately €14.9 trillion in the first half of 2026. That figure represents the value of outstanding agreements, not daily trading volume.
Broadridge has also expanded its repo network to support G7 securities, illustrating how financial institutions are developing tokenized financing infrastructure across a broader range of government bond markets.
Digital Cash and Interoperability Remain Key Challenges
BNY advanced its digital cash capabilities in January 2026 with the launch of tokenized deposits. Such capabilities matter because tokenized financing requires not only digital securities but also a means of settling payments in digital form.
Other financial market infrastructure providers are pursuing similar initiatives. In July 2026, the Depository Trust & Clearing Corporation (DTCC) tokenized securities held at the Depository Trust Company on the Besu and Canton networks, with more than 30 firms participating. The tests included a Treasury repo delivery-versus-payment transaction, while DTCC's tokenization service was scheduled for October.
Despite these developments, connecting separate systems remains a significant challenge. BNY's private ledger is only one of several networks being developed for tokenized financial assets, raising questions about fragmented liquidity and risks when assets move between ledgers.
The Bank for International Settlements (BIS) has warned that digital settlement systems must preserve trust in money and legal finality. For tokenized repo to operate at scale, financial institutions will need to ensure that collateral can move safely across platforms while payment settlement remains reliable.
source: cryptopolitan
Writer: Ethan Collins
Crypto Journalist
Ethan Collins reports on developments across the cryptocurrency and blockchain sector. His work covers market movements, protocol updates, regulatory changes, and emerging trends in digital assets.
He focuses on presenting complex topics in a clear and accessible manner for a broad readership.
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