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 shared with CoinDesk on Tuesday.
Prime brokers transformed U.S. Treasuries held at the Depository Trust & Clearing Corporation (DTCC) into tokenized assets on Canton, using them as collateral for USDC-backed financing. The Canton Network, a privacy-centric blockchain developed by Digital Asset, facilitated this innovative transaction.
The key players in this groundbreaking transaction include Bank of America (BAC), Circle (CRCL), Citadel, Cumberland DRW, DTCC, Hidden Road, Societe Generale, Virtu Financial, and Tradeweb. Most of these entities were also part of Digital Asset’s successful $135 million fundraising round in June.
Tokenization of government debt, a vital collateral asset in global markets, underscores a broader trend of bringing financial instruments and real-world assets onto blockchain platforms. Major financial institutions are increasingly exploring tokenization to streamline settlement processes, enhance transparency, and ensure continuous market operations.
Participants in the Canton transaction view it as a significant milestone towards a unified market structure that combines the scale of traditional finance with the flexibility of decentralized blockchain technology. They are already planning additional transactions later this year.
“[The transaction] showcases how market participants can leverage real-time collateral mobility and 24/7 financing using blockchain-based assets, laying the foundation for a more efficient and inclusive global financial ecosystem,” remarked Kelly Mathieson, Chief Business Development Officer at Digital Asset.
For further insights, read: Decentralized Finance and Tokenization Growth Still Disappoints: JPMorgan
