Digital Asset and a consortium of major financial institutions have successfully completed the first real-time, fully on-chain financing of U.S. Treasuries against USDC on the Canton Network.
The repo trade, conducted on Tradeweb, settled instantly on a Saturday, bypassing the usual weekday limitations of traditional settlement systems, as per a press release disclosed to CoinDesk on Tuesday.
Prime brokers transformed U.S. Treasuries held at the Depository Trust & Clearing Corporation (DTCC) into tokenized assets on Canton, leveraging them as collateral for USDC-backed financing. The Canton Network, developed by Digital Asset, is a privacy-centric blockchain.
The institutions participating in the transaction encompass Bank of America (BAC), Circle (CRCL), Citadel, Cumberland DRW, DTCC, Hidden Road, Societe Generale, Virtu Financial, and Tradeweb. The majority of these entities were backers of Digital Asset in its $135 million fundraising round in June.
The tokenization of government debt, a pivotal collateral asset in global markets, forms part of a broader initiative to migrate financial instruments, or real-world assets, onto blockchains. Global banks and asset managers are exploring tokenization to streamline settlement times, enhance transparency, and maintain market accessibility 24/7.
The participants in the Canton transaction view it as a stride towards a unified market structure blending the scale of traditional finance with the programmability of decentralized blockchain networks. They are planning additional transactions later this year.
“[The transaction] showcases how market participants can unlock real-time collateral mobility and continuous financing using on-chain assets, laying the foundation for a significantly more efficient and inclusive global financial system,” remarked Kelly Mathieson, chief business development officer at Digital Asset.
For more information: Decentralized Finance and Tokenization Growth Still Disappoints: JPMorgan