U.S. custodian bank BNY and trading firm Citadel Securities have completed a trade using tokenised U.S. Treasuries, CoinDesk reported on Oct. 13 (local time).

The report said the trade was conducted to show that tokenised Treasuries can be used immediately as collateral to borrow funds after settlement is completed.

Banks and trading firms borrow short-term funds using U.S. Treasuries as collateral to secure trading capital. It takes time to move Treasuries between accounts and settlement systems. That ties up assets that could be used elsewhere during that time.

On Wall Street, efforts to move traditional assets onto blockchains continue. BlackRock, Franklin Templeton and JPMorgan have introduced tokenised funds and securities on the view that they can reduce settlement times, automate processes and make it easier to move assets.

Dan Doherty (댄 도허티), head of digital assets operations at Citadel Securities, said, "Efficiently moving high-quality collateral is key to markets functioning properly." He said reducing delays across the entire trading process could improve institutional market operations.

BNY plans to expand digital cash and tokenised deposit functions to support blockchain-based settlement and financing. It also plans to extend operating hours for its existing settlement systems that handle Fed-eligible securities and U.S. tri-party trades. It aims to support European and Asian trading hours next year.

Caroline Weinberg (캐롤린 와인버그), BNY's chief innovation and market transition officer, said, "By using tokenised U.S. Treasuries for both settlement and financing, we are building a more tightly connected, efficient financial system that runs 24 hours a day."