A group of global financial firms have entered into the first intraday cross-border 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 statement shared with CoinDesk. It also includes the first currency exchange in which token gilts were exchanged for token deposits denominated in a currency other than sterling.
In a repurchase agreement, 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 liquidity. 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 hours.
Participants in the latest round include LSEG, Euroclear, DTCC, Tradeweb, Citadel Securities and Société Générale, as well as digital asset companies such as Archax and Cumberland DRW. TreasurySpring has integrated interest payments and risk terms directly into transaction-related smart contracts.
The move is part of Canton’s larger ambition to make $300 trillion in global assets such as government bonds more useful as collateral by tokenizing them on a blockchain, Kelly Matheison, Digital Assets’ director of business development, said in an interview with CoinDesk.
Digital Asset is the lead development company behind Canton Network and has raised funding last year from financial heavyweights such as Goldman Sachs, DRW, Citadel Securities, BNY and Nasdaq.
“There are approximately $300 trillion of high-quality liquid assets in the world,” Matheison said. “Yet only about 10 to 11 percent of that, or about $28 trillion, is used as collateral at any given time.”
The reason is timing. In traditional markets, firms must plan the cross-border movement of securities in advance, avoiding settlement cycles, batch processing and market cut-off times.
“From a practical standpoint, this limits the amount of high-quality liquid assets you can use 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, rather than waiting for batch settlement windows. This way, financial companies can use their balance sheets more efficiently and trade more, Mathieson said.
