TheBlock
BNY and Citadel Securities completed a triparty repo using a tokenized representation of a 2-year U.S. Treasury note, in what BNY called the first use of tokenized assets on a major triparty repo platform. The note was bought through BNY on Tradeweb and recorded on the bank’s private digital ledger, settling within minutes rather than the standard T+1 cycle. Citadel then pledged it as collateral in an overnight repo and received cash from BNY.
Why it matters
The workflow connects two institutional uses for a Treasury: settlement and financing. Instead of waiting for the standard T+1 cycle, the tokenized representation settled in minutes before being used as repo collateral. BNY’s Carolyn Weinberg said the transaction showed what tokenized assets can enable in institutional workflows, including a more connected and always-on financial system.
The deal builds on BNY’s January launch of tokenized deposits for institutional clients, including Citadel Securities, ICE and Ripple Prime. Those blockchain-based representations of deposits held at BNY are intended for uses such as collateral and margin transactions. The latest transaction applies tokenization to a Treasury security within a repo workflow.
Market impact
The transaction is a live institutional use case for tokenized assets in Treasury settlement and financing, rather than a standalone token launch. BNY says it plans to add digital cash and tokenized deposit capabilities for institutional settlement and financing, and extend operating hours for platforms handling Federal Reserve-eligible securities and U.S. triparty transactions. Expansion into European and Asian trading hours is planned for next year.
The broader push includes JPMorgan’s JPM Coin deposit token, launched for institutional clients in November 2025. A group of major U.S. banks, including JPMorgan and Citigroup, is also planning a tokenized deposit network as early as the first half of 2027. BNY’s transaction adds a Treasury-backed collateral workflow to that growing institutional infrastructure effort.
Frequently asked questions
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How did the Treasury note move through the repo workflow?
Citadel bought the 2-year U.S. Treasury note through BNY on Tradeweb. BNY recorded a tokenized representation on its private digital ledger, then Citadel pledged it as collateral in an overnight repo.
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How did settlement time compare with the standard cycle?
The tokenized representation settled within minutes, compared with the standard T+1 cycle.
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What did Citadel receive for pledging the tokenized Treasury?
Citadel used the tokenized Treasury as collateral in an overnight triparty repo and received cash from BNY.
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How does the transaction relate to BNY’s tokenized deposit service?
BNY launched tokenized deposits for institutional clients in January, including Citadel Securities, ICE and Ripple Prime. The service creates blockchain-based representations of client deposits for uses such as collateral and margin transactions.
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What further institutional tokenization plans did BNY describe?
BNY plans additional digital cash and tokenized deposit capabilities for institutional settlement and financing. It also expects to extend settlement-platform hours, with European and Asian trading hours planned for next year.
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