- A trial of tokenised US Treasury (UST) transactions on the Canton Network has showcased, for the first time, that tokenised assets can be passed between counterparties and reused.
- The project involves multiple financial institutions including Circle, whose USDC stablecoin was combined with USTs to settle transactions onchain in the pilot’s first phase.
- Advances in tokenised Treasury transactions pave the way for “broader adoption and scale” that could help TradFi players improve collateral mobility and efficiency.
A pilot project using tokenised US Treasuries (USTs) as collateral for transactions has completed its second phase, demonstrating the ability to reuse collateral in real-time — for the first time.
The blockchain hosting the trial, Canton Network, said overcoming the challenges inherent in the re-use of collateral by other entities involved in the transaction (aka rehypothecation) was an important milestone.
For the first time, the transactions showcased the ability to reuse tokenized Treasuries across counterparties in real time, overcoming long-standing operational challenges of rehypothecation in traditional markets.
Canton NetworkThe pilot is a collaboration between Digital Asset (the creator of Canton Network) and financial institutions including Bank of America, Brale, Circle, Citadel Securities, Cumberland DRW, Digital Asset, M1X Global, Societe Generale, Tradeweb, and Virtu Financial.
By enabling real-time collateral rehypothecation and broadening stablecoin liquidity, the Network continues to pave the way for financial institutions to achieve enhanced collateral mobility and operational efficiency.
Chris Zuehlke, Global Head of Cumberland and Partner at DRWFive transactions were completed in stage 2 and a wider range of stablecoins were used, including SBC and USDM1. The first phase of the pilot, completed in July 2025, involved just one transaction to establish the feasibility of fully onchain US Treasury financing against USDC.
Tokenisation Momentum Growing on Canton Network
Justin Peterson, Chief Technology Officer at electronic trading fintech and trial participant Tradeweb, said: “Demonstrating real-time collateral reuse and expanded stablecoin liquidity isn’t just a technical achievement– it’s a blueprint for what the future of institutional finance can look like.”
The US Treasury market is the largest and most liquid government securities market globally. Compliant, onchain collateral mobility has the potential to shake up capital markets through greater access to liquidity and less friction compared to TradFi.
Related: Matt Hougan: Tokenisation – Wall Street’s Next Trillion-Dollar Revolution
Kelly Mathieson, Chief Business Development Officer of Digital Asset, said that proving collateral reuse was possible and expanding stablecoin liquidity showed the trial was “part of a thoughtful progression towards a new market model.” She teased that there was “more to come before the end of 2025.”
Digital Asset’s Canton Network is a permissionless L1 with configurable privacy, targeted at institutional-grade tokenisation, with more than US$6 trillion (AU$9t) of assets onchain.
The company announced on December 5 that it had secured US$50 million (AU$75.2m) in funding from BNY, iCapital, Nasdaq, and S&P Global. It said the investment “reinforces the critical role Canton is playing in the next phase of financial market infrastructure, bringing together decentralization with the privacy, legal certainty, and regulatory compliance required by global markets.”
Credit: Source link
