A group of global financial firms completed the first cross-border intraday repurchase agreement using tokenized UK government bonds on the Canton Network, a blockchain designed for institutions.
The transaction marks the first time digital versions of gilts, a $2-trillion market, have been used in a cross-border intraday repo, according to a release shared with CoinDesk. It also includes the first cross-currency trade where tokenized gilts were exchanged for tokenized deposits denominated in a currency other than the British pound.
In a repo, one party sells a security and agrees to buy it back later, often on the same day. Banks and trading companies use these agreements to raise short-term cash. By placing both cash and bonds on a shared blockchain, the group aims to move security to real-time rather than waiting for traditional market hours.
Participants in the latest round include LSEG, Euroclear, DTCC, Tradeweb, Citadel Securities and Societe Generale, alongside digital asset firms such as Archax and Cumberland DRW. TreasurySpring embedded interest payments and risk terms directly into smart contracts attached to the trades.
The move fits into Canton’s larger ambition to make $300 trillion of global assets such as government bonds more useful as collateral by tokenizing them on a blockchain, Kelly Matheison, Chief Business Development Officer for Digital Assets, said in an interview with CoinDesk.
Digital Asset is the key development company behind Canton Network and last year raised funding from financial heavyweights such as Goldman Sachs, DRW, Citadel Securities, BNY and Nasdaq.
“There are about $300 trillion of high-quality liquid assets around the world,” Matheison said. “Yet only about 10%-11% of that — about $28 trillion — is being used as collateral at any given time.”
The reason for that is timing. In traditional markets, firms must plan days ahead to move securities across borders, navigate settlement cycles, batch processing and market cut-off times.
“On a practical level, it limits the amount of high-quality liquid assets that you can call upon at any one time,” she said.
Using blockchain ledgers like Canton for these transactions allows counterparties to transfer ownership in real time and around the clock instead of waiting for batch settlement windows. That way, financial firms can use their balance sheets more efficiently and trade more, Mathieson said.
