Wall Street Achieves 24/7 Treasury Financing Milestone with Tokenization
Wall Street Embraces 24/7 Treasury Financing Through Tokenization
In a groundbreaking move for financial markets, major Wall Street firms have successfully executed the first real-time, fully on-chain financing of U.S. Treasuries using USDC on the Canton Network. This innovative repo trade, facilitated by Tradeweb, settled atomically on a Saturday, overcoming the traditional weekday-only limitations of existing settlement systems.
Key Takeaways
- First 24/7 U.S. Treasury financing achieved through tokenization.
- Transaction settled atomically on a Saturday, bypassing traditional settlement constraints.
- Leverages tokenized U.S. Treasuries as collateral for USDC financing.
- Demonstrates a blend of traditional finance scale with blockchain programmability.
The Tokenization Process
Prime brokers involved in the transaction converted U.S. Treasuries, held at the Depository Trust & Clearing Corporation (DTCC), into tokenized assets on the Canton Network. These tokenized assets then served as collateral for financing backed by USDC. The Canton Network, developed by Digital Asset, is a blockchain designed with a focus on privacy.
Major Players Involved
The landmark transaction saw participation from prominent financial institutions including Bank of America, Circle, Citadel Securities, Cumberland DRW, DTCC, Hidden Road, Societe Generale, Virtu Financial, and Tradeweb. Notably, most of these firms were investors in Digital Asset's recent $135 million fundraising round.
Advancing Real-World Asset Tokenization
This development is a significant step in the broader effort to bring financial instruments, often referred to as real-world assets, onto blockchain technology. Tokenizing government debt, a critical collateral asset in global markets, aims to reduce settlement times, enhance transparency, and enable markets to operate around the clock.
A Unified Market Structure
Participants hailed the transaction as a crucial advancement towards a unified market structure that merges the extensive scale of traditional finance with the inherent programmability of decentralized blockchain networks. The firms involved have indicated plans for further transactions later this year, signaling a commitment to this new paradigm.