BNY plans to support around the clock settlement of US Treasuries, according to a client letter reported by Bloomberg. The bank intends to pilot tokenized Treasuries on its private blockchain by the end of 2026 and to offer 24/7 settlement for both conventional and tokenized Treasuries in 2027, with expansion of its traditional settlement rails for Fed eligible securities starting later this year.
The bank has already tested after hours activity. Earlier this year it settled a Treasury transaction after the Federal Reserve’s Fedwire Securities Service had closed for the day. The trade involved Ripple, issuer of the RLUSD stablecoin, and Dreyfus acting for OpenEden, issuer of the USDO stablecoin. Both stablecoins hold short dated Treasuries as reserves, and BNY is reserve custodian for both. The transaction was executed on Tradeweb and settled shortly afterwards using conventional cash processes.
BNY occupies a position no other institution matches. It is the dominant triparty agent for US repo, supporting $24.3 trillion in average daily clearance and processing $2.5 trillion in payments each day. It has also quietly become the balance sheet of choice for stablecoin reserves, custodying assets backing USDC, RLUSD and USDO. When both sides of a trade already custody at BNY, as here, settlement after Fedwire hours can happen on BNY’s own books. The demonstration proves the power of that hub position rather than any new technology, and it only extends to counterparties inside the tent, settling in commercial bank money rather than at the central bank.
Article continues …
Want the full story? Pro subscribers get complete articles, exclusive industry analysis, and early access to legislative updates that keep you ahead of the competition. Join the professionals who are choosing deeper insights over surface level news.
