Facilitates Asset Mobility Through DLT (Distributed Ledger Technology)
Digital Asset Completes Groundbreaking On-Chain Financing of U.S. Treasuries
In a significant leap forward for blockchain technology, Digital Asset, a leading digital asset and blockchain technology firm, successfully completed the first real-time, fully on-chain financing of U.S. Treasuries against Circle's stablecoin, USDC, on its Canton Network on August 12, 2025.
This pioneering transaction, which marks a foundational step towards a digital capital market, was executed in collaboration with several major financial institutions, including Bank of America, Citadel Securities, Cumberland DRW, Digital Asset, DTCC, Hidden Road, Societe Generale, Tradeweb, Virtu Financial, and venture capital firm a16zcrypto.
The on-chain financing of tokenized U.S. Treasuries against USDC lays the foundation for how blockchain is unlocking 24/7 funding, according to Chris Zuehlke, partner at market maker DRW and global co-head of Cumberland. Additional transactions are targeted for later this year.
The process works by enabling real-time, fully on-chain repo transactions using tokenized U.S. Treasury securities (UST) as collateral against the stablecoin USDC on the Canton Network. This allows near-instantaneous, atomic settlement of financing transactions 24/7, overcoming legacy market and settlement time restrictions.
U.S. Treasuries are tokenized and held on-chain, making them freely transferable collateral on the Canton Network's Global Collateral Network. USDC serves as the cash leg in the transaction, enabling digital, on-chain cash settlement that is continuous and not limited by off-ledger cash access or banking hours.
Prime brokers hold client UST in custodied accounts at a DTCC subsidiary, integrating traditional custody with tokenization and on-chain transferability. Clearstream International serves as the Trusted Third Party (TTP) of the service, maintaining the books and records of the collateral on the ledger.
The underlying technology for this service is provided by HQLAx, a company that offers DLT solutions for collateral management. Eurex Clearing, another key player, launched the first global distributed ledger technology (DLT)-enabled collateral mobilization service on July 29, 2025.
Improved collateral mobility allows banks to become more capital efficient, access broader pools of liquidity, and compete more aggressively in capital markets with a leaner balance sheet. The first transaction involved J.P. Morgan mobilizing securities collateral for PGGM, a Dutch pension fund investor.
Danny Hand, prime financial services product development at J.P. Morgan, believes the transaction demonstrates the bank's faith in the transformative power of DLT for collateral management across the industry. Eurex Clearing is also participating in international initiatives such as Project Agora led by the Bank for International Settlements, aiming to enhance cross-border payments through tokenization and public-private collaboration.
The European Central Bank (ECB) is also planning to enable settlement of DLT transactions in central bank money by linking DLT platforms with TARGET Services, with a pilot phase planned by the end of Q3 2026. This initiative is expected to further boost the adoption and integration of blockchain technology in the financial sector.
- This groundbreaking on-chain financing of U.S. Treasuries is a significant step forward for the fintech industry, as it shows how technology is revolutionizing traditional finance.
- The use of stablecoins like USDC in derivatives trading could unlock 24/7 liquidity for the industry, as demonstrated by the real-time, fully on-chain financing of U.S. Treasuries.
- The successful collaboration between Digital Asset, traditional financial institutions, and startups indicates a growing industry acceptance of blockchain technology in business operations.
- The potential for improved collateral mobility through blockchain technology could lead to increased capital efficiency, broader access to liquidity, and more competitive capital markets for businesses.
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