A group of global financial firms have 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 repository, according to a statement shared with CoinDesk. It also includes the first cross-currency trade in which tokenized gilts were exchanged for tokenized deposits denominated in a currency other than sterling.
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 the cash and the bond 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, along with digital asset companies such as Archax and Cumberland DRW. TreasurySpring built interest payments and risk terms directly into smart contracts linked to trades.
The move fits into Canton’s larger ambition to make $300 trillion in global assets, such as government bonds, more useful as collateral by converting them to a blockchain, Kelly Matheison, director of business development at Digital Assets, said in an interview with CoinDesk.
Digital Asset is the key development company behind Canton Network and raised funding last year 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. “However, only 10% to 11% of that amount (approximately $28 trillion) is used as collateral at any given time.”
The reason for this is time. In traditional markets, companies must plan days in advance for the movement of securities across borders, navigating settlement cycles, batch processing, and market cut-off times.
“On a practical level, it restricts the amount of high-quality liquid assets that can be used at any one time,” he 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. That way, financial companies can use their balance sheets more efficiently and trade more, Mathieson said.
