U.S. Treasury Repo Trades Conducted On-Chain for the First Time by Canton Network
In a groundbreaking development for institutional finance, Digital Asset, in collaboration with a group of major financial institutions, successfully executed a U.S. Treasury repurchase agreement (repo) transaction on the Canton Network. This marks the first live atomic settlement of both cash (USDC stablecoin) and tokenized U.S. Treasuries collateral entirely on-chain[1][3].
The transaction, executed over the weekend through Tradeweb, demonstrates the potential for near-instantaneous, irreversible transfers of assets without relying on traditional banking systems, market hours, or settlement windows like Fedwire[1][2][3]. This milestone could pave the way for 24/7 access to financing and collateral movement, even enabling transactions outside of legacy market operating times[1].
The Canton Network, a public, interoperable blockchain designed for regulated institutions, aims to interconnect various applications and asset classes for seamless cross-asset settlement[3]. Key contributions to the integration of traditional finance with on-chain settlement include the tokenization of real-world U.S. Treasury securities custodied by the Depository Trust Company (DTC, a DTCC subsidiary), native USDC issuance on Canton, and atomic settlement that simultaneously settles cash and collateral[1][3][4].
The collaboration of institutions such as Bank of America, Citadel Securities, Societe Generale, Virtu Financial, DTCC, and Tradeweb showcases the potential for blockchain networks to mesh seamlessly with established capital markets[1][2][4]. The Canton Network's interoperable, permissioned blockchain infrastructure serves as a shared environment enabling synchronized, compliant, and private settlement of multiple asset classes[1][3].
The Global Collateral Network initiative, facilitated by the Canton Network, aims to create an integrated market infrastructure for the continuous circulation of high-quality liquid assets like Treasuries under institutional compliance standards[6]. Further transactions using this model are planned later in the year as part of ongoing tests aimed at validating the network's interoperability and privacy mechanisms[7].
While tokenized Treasuries are already available on public blockchains like Ethereum, Polygon, Arbitrum, XRP Ledger, Avalanche, and Stellar, most existing models either settle one side of the transaction off-chain or operate without the direct involvement of major banks and central securities depositories[8]. The Canton Network's achievement positions it as a significant step forward in institutional blockchain-based settlement[5].
References:
- Digital Asset - Press Release
- CoinDesk - First On-Chain U.S. Treasury Repo Settlement Completed on Canton Network
- Finextra - Canton Network completes first live atomic settlement of a US Treasury repo transaction
- Banking Tech - Canton Network completes first live on-chain atomic settlement of US Treasury repo transaction
- Coindesk - Canton Network positions itself as a blockchain for institutional finance
- Finextra - Canton Network partners with DTCC to develop Global Collateral Network
- CoinDesk - Canton Network to test privacy and interoperability with further transactions
- CoinDesk - Canton Network completes first live atomic settlement of US Treasury repo transaction
In the realm of institutional finance, the integration of technology, particularly blockchain, is increasingly evident. The successful on-chain settlement of a U.S. Treasury repo transaction on the Canton Network, a collaboration between Digital Asset and major financial institutions, demonstrates the potential for technology to revolutionize the finance sector, enabling near-instantaneous, irreversible transfers of assets and potentially paving the way for 24/7 access to financing.
