CoinDesk
BNY, the world's largest custody bank, plans to support round-the-clock settlement of conventional and tokenized U.S. Treasuries by 2027, after completing an after-hours trade that used the reserves of two stablecoin issuers. The bank will begin testing tokenized Treasuries on a private blockchain by year-end and will extend its existing settlement network later this year to cover more of the Asian, European and U.S. trading days, according to a client letter reported by Bloomberg.
The earlier transaction involved Ripple's RLUSD and OpenEden's USDO, with Ripple participating directly and BNY's cash-management arm Dreyfus acting for OpenEden. Tradeweb handled the trade after Fedwire Securities had stopped processing secondary-market Treasury transfers for the day. BNY said the transaction settled shortly afterward through existing cash rails, and the securities themselves were not tokenized. The test instead showed that Treasury activity tied to stablecoin reserves can continue once the main U.S. settlement window closes.
Why it matters
RLUSD and USDO hold short-dated government debt as reserve assets. The tokens trade continuously, but the Treasuries backing them remain tied to weekday settlement windows, which can delay reserve adjustments following large creations, redemptions or collateral calls. Closing that gap is the structural problem BNY is solving: the on-chain wrapper runs 24/7, the underlying U.S. fixed-income market does not. BNY already acts as primary custodian for RLUSD's reserves and provides custody and investment management for OpenEden's tokenized Treasury fund, and it introduced tokenized deposit balances for institutional clients in January.
Market impact
The move positions the largest U.S. custody franchise as the settlement layer between TradFi Treasury plumbing and stablecoin issuers running on continuous rails. If the 2027 target lands, it removes one of the cleanest structural arbitrage frictions in tokenized Treasuries, the weekend and after-hours lag that lets stablecoin reserve baskets drift from their underlying cash. Watch for the year-end private-chain pilot to set the template other custodians are benchmarked against.
Frequently asked questions
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What did BNY actually test in the after-hours Treasury pilot?
The pilot used reserves backing Ripple's RLUSD and OpenEden's USDO, with Tradeweb routing the trade after Fedwire Securities had stopped processing secondary-market Treasury transfers. The securities were not tokenized; the test showed Treasury activity tied to stablecoin reserves can keep moving after the U.S.…
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Why does 24/7 settlement matter for stablecoin reserves?
RLUSD and USDO trade continuously, but the short-dated Treasuries backing them still settle only on weekdays. That gap can delay reserve adjustments after large creations, redemptions or collateral calls, letting the on-chain wrapper and the underlying cash drift apart over weekends.
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What is BNY's relationship to RLUSD and OpenEden already?
BNY is already the primary custodian for RLUSD's reserves and provides custody and investment management for OpenEden's tokenized Treasury fund. It rolled out tokenized deposit balances for institutional clients in January.
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When will tokenized Treasuries be tested on-chain?
BNY plans to begin testing tokenized Treasuries on a private blockchain by the end of this year, and to extend its existing settlement network later this year to cover more of the Asian, European and U.S. trading days.
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What is the 2027 target for BNY's Treasury settlement plans?
BNY has set a 2027 target for round-the-clock settlement of both conventional and tokenized U.S. Treasuries, which would retire the weekend lag that currently constrains tokenized Treasury and stablecoin reserve flows.
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