Digital Asset and a group of major financial firms have executed the first real-time, fully on-chain financing of U.S. Treasuries against USDC on the Canton Network.
The repo trade, carried out on Tradeweb, settled atomically on a Saturday, sidestepping the weekday-only limitations of traditional settlement systems, according to a press release shared with CoinDesk on Tuesday.
Prime brokers converted U.S. Treasuries held at the Depository Trust & Clearing Corporation (DTCC) into tokenized assets on Canton, then used them as collateral for USDC-backed financing. The Canton Network is a privacy-focused blockchain developed by Digital Asset.
Institutions involved in the transaction include Bank of America (BAC), Circle (CRCL), Citadel, Cumberland DRW, DTCC, Hidden Road, Societe Generale, Virtu Financial and Tradeweb. Most of these firms invested in Digital Asset in its $135 million fundraising round in June.
Tokenization of government debt, a crucial collateral asset in global markets, is part of a broader push to bring financial instruments, or real-world assets, onto blockchains. Global banks and asset managers explore tokenization to cut settlement times, increase transparency and keep markets open around the clock.
Participants in the Canton transaction said it marks a step toward a unified market structure blending traditional finance’s scale with the programmability of decentralized blockchain rails. They plan more transactions later this year.
“[The transaction] demonstrates how market participants can unlock real-time collateral mobility and round-the-clock financing using assets on chain, which lays the groundwork for a fundamentally more efficient and accessible global financial system,” Kelly Mathieson, chief business development officer at Digital Asset, said in a statement.
Read more: Decentralized Finance and Tokenization Growth Still Disappoints: JPMorgan