BNY, formerly known as The Bank of New York Mellon, and Citadel Securities have completed a transaction using a tokenized U.S. Treasury to to connect trade execution and settlement with short-term financing in a single workflow.
According to BNY’s announcement, Citadel Securities purchased a two-year U.S. Treasury note through Tradeweb. BNY recorded a tokenized representation of the security on its private digital ledger, with settlement completed within minutes instead of the standard T+1 cycle.
BNY said the transaction marked the first use of tokenized assets on a major triparty repurchase agreement (repo) platform. The claim refers to the use of a tokenized asset in this type of workflow, rather than the first tokenization of a U.S. Treasury or the first repo transaction conducted using blockchain technology.
After settlement, Citadel Securities used the tokenized Treasury as collateral in an overnight triparty repo, with BNY providing cash in return. A repo is a short-term financing arrangement in which securities are used as collateral for cash. In a triparty repo, a third-party institution manages the collateral and related processes.
Faster Collateral Transfers
The transaction shows how tokenized Treasuries can be used for financing after settlement. Banks and trading firms use government bonds as collateral for short-term borrowing and other market activities.
Moving securities between accounts and settlement systems can take time, leaving assets temporarily unavailable for other transactions. In this case, recording the Treasury on BNY’s digital ledger allowed settlement to be completed within minutes, after which the security was used as collateral. However, the transaction alone does not establish how much time or cost tokenization could save across the wider market.
Dan Doherty, digital assets operations lead at Citadel Securities, said efficient movement of high-quality collateral was fundamental to well-functioning markets. He added that reducing friction across the trade lifecycle could improve institutional market operations.
BNY Plans Longer Settlement Hours
BNY plans to introduce additional digital cash and tokenized deposit capabilities to support on-chain settlement and financing for institutional clients.
The bank also expects to extend operating hours for its traditional settlement platforms for Federal Reserve-eligible securities and U.S. triparty transactions, with plans to cover European and Asian trading hours in 2027.
Longer operating hours could help financial institutions manage transactions across different time zones. BNY expects tokenization and extended settlement availability to work together to support more flexible settlement and collateral management.
BNY has already introduced a tokenized deposit service for institutional clients. Announced in January 2026, the service allows clients to transfer cash deposits as digital tokens using blockchain technology. It is designed to support round-the-clock payments, collateral management and margin settlement while keeping the underlying funds within the regulated banking system.
The bank has also expanded its digital asset custody services in Europe. In October 2026, BNY extended these services to select institutional clients in the European Union after its Belgian banking unit joined the European Securities and Markets Authority’s MiCA register in July.
The approval allows the bank to offer custody, administration and transfer services for crypto assets, including Bitcoin, Ether, Solana and USDC.
Wall Street Explores Tokenized Securities
The transaction comes as financial institutions explore using blockchain technology for traditional assets. BlackRock, Franklin Templeton, and JPMorgan have also pursued tokenized funds or securities.
BNY, which reported $62.6 trillion in assets under custody and administration as of June 30, 2026, plays a major role in securities settlement and collateral management. The bank’s next steps will focus on expanding digital cash and tokenized deposit capabilities while extending the availability of its settlement infrastructure.
The firms have not announced a broader commercial rollout of this specific workflow. BNY’s planned service expansion and longer operating hours are the next developments to watch as institutional markets explore how tokenization could support more continuous trading and financing.
Also Read: Singapore Gulf Bank Taps BNY for 24/7 Dollar Payment Expansion
