A group of global financial companies has completed the first cross-border intraday repurchase agreement using tokenized UK government bonds on Canton Network, a blockchain designed for institutions.
According to a release shared with CoinDesk, the transaction marks the first time a digital version of Gilt, a $2 trillion market, will be used for cross-border intraday repos. This also includes the first cross-currency transaction, exchanging tokenized gold coins for tokenized deposits denominated in currencies 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 transactions to raise short-term cash. By placing both cash and bonds on a shared blockchain, the group aims to move collateral in real-time, rather than waiting for traditional market times.
Participants in the latest round include LSEG, Euroclear, DTCC, Tradeweb, Citadel Securities and Societe Generale, as well as digital asset firms such as Archax and Cumberland DRW. TreasurySpring embedded interest payments and risk clauses directly into the smart contract associated with the transaction.
Kelly Matheson, chief business development officer for digital assets, said in an interview with CoinDesk that the operation fits into Canton’s larger ambitions to tokenize $300 trillion in global assets, including government bonds, on the blockchain to make them more useful as collateral.
Digital Asset is the primary developer behind Canton Network, which raised funding last year from financial giants including Goldman Sachs, DRW, Citadel Securities, BNY, and Nasdaq.
“There is approximately $300 trillion of high-quality liquid assets in the world,” Matheison said. “But only about 10 to 11 percent of that, or about $28 trillion, is used as collateral.”
The reason is timing. Traditional markets require companies to plan days in advance to move securities across borders and overcome settlement cycles, batch processing, and market cut-off times.
“On a practical level, it limits the amount of high-quality liquid assets available at any given time,” she said.
Using a blockchain ledger like Canton for these transactions allows counterparties to transfer ownership in real-time and around the clock, without waiting for a bulk settlement window. That would allow financial companies to use their balance sheets more efficiently and make more deals, Matheson said.
