24/7 financial rails: How BNY plans to eliminate the weekend lag in U.S. Treasuries

BNY, the world’s largest custody bank, plans to support round-the-clock settlement of conventional and tokenized U.S. Treasuries in 2027, after completing an after-hours trade involving the reserves of 2 stablecoin issuers.

The bank will test tokenized Treasuries on a private blockchain by the end of the year 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 letter sent to clients reported by Bloomberg.

The earlier transaction involved Ripple’s RLUSD and OpenEden’s USDO with Ripple participating directly, while BNY’s cash-management business unit Dreyfus acted for OpenEden.

Tradeweb handled the trade after Fedwire Securities had stopped processing secondary-market Treasury transfers for the day, according to the report.

BNY said the transaction settled shortly afterward through existing cash rails. The securities were not tokenized, but the test instead showed that Treasury activity tied to stablecoin reserves could continue after the main U.S. settlement window closed.

RLUSD and USDO hold short-dated government debt as reserve assets. The tokens trade continuously, but the Treasuries behind them remain tied to weekday settlement windows.

That can delay reserve adjustments following large creations, redemptions or collateral calls.

BNY is already the primary custodian for RLUSD’s reserves and provides custody and investment management for OpenEden’s tokenized Treasury fund.

The bank introduced tokenized deposit balances in January, giving institutional clients an on-chain representation of commercial-bank money.