BNY Mellon plans 24/7 U.S. Treasury settlement by 2027

BNY Mellon, the world's largest custody bank, is planning to enable 24/7 settlement for both conventional and tokenized U.S. Treasuries by 2027. This initiative follows a successful after-hours test involving the reserves of two stablecoin issuers, Ripple and OpenEden.

The bank intends to begin testing tokenized Treasuries on a private blockchain by the end of this year. Concurrently, BNY Mellon will expand its existing settlement network to accommodate more of the global trading day, covering extended hours in Asia, Europe, and the U.S.

The recent transaction involved Ripple's RLUSD and OpenEden's USDO. Ripple participated directly, while BNY's Dreyfus unit represented OpenEden. The trade was executed by Tradeweb after the Fedwire Securities system had ceased secondary-market Treasury transfers for the day. The transaction settled shortly thereafter via existing cash rails.

While the securities in this test were not tokenized, the exercise demonstrated that Treasury activity linked to stablecoin reserves can continue beyond the standard U.S. settlement window. Tokens like RLUSD and USDO, which hold short-dated government debt as reserves, trade continuously. However, the underlying Treasuries are subject to weekday settlement schedules, which can delay reserve adjustments after significant collateral calls or changes in creation and redemption volumes.