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Tokenised Treasuries could speed up repo markets

Created at 12 Aug · 3:36 AM1 source↑ Market-relevant
IN SHORT

The Depository Trust & Clearing Corporation (DTCC) is piloting tokenised US Treasuries, which could significantly shorten settlement cycles and enable 24/7 repo markets. This innovation aims to improve the efficiency of cash as a lubricant for trading activities.

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Who's Involved

DTCC
piloting tokenised US Treasuries

↳ Why This Matters

The pilot of tokenised US Treasuries by the DTCC could lead to more efficient and accessible capital markets, potentially lowering costs and increasing trading opportunities for financial firms.

Key facts

  • The Depository Trust & Clearing Corporation (DTCC) is piloting tokenised US Treasuries.
  • This initiative aims to shorten settlement cycles.
  • The pilot could enable 24/7 repo markets.
  • The goal is to make cash more efficient for trading activities.

The Depository Trust & Clearing Corporation (DTCC) is piloting tokenised US Treasuries, a move that could significantly reduce settlement cycles and potentially enable 24/7 repo markets. This innovation is seen as a way to improve the efficiency of cash, which is crucial for the trading activities of hedge funds and prop trading firms. Currently, cash is an essential but inefficient lubricant for trading, often sitting idle and earning no return. The tokenisation of Treasuries offers a potential solution to these inefficiencies.

Frequently asked questions

The Depository Trust & Clearing Corporation (DTCC) is a post-trade financial services company that provides clearing and settlement services for financial markets.

Tokenised Treasuries are digital representations of U.S. Treasury securities recorded on a blockchain or distributed ledger technology, enabling faster and more efficient trading and settlement.

The repo market, or repurchase agreement market, is a source of short-term borrowing, primarily for dealers in government securities. It involves the sale of securities with an agreement to repurchase them at a higher price.

What Happens Next

01Further developments on the DTCC's tokenised Treasury pilot.

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Cadence
CME Headlines
  • Euro futures held near 7-week highs ahead of key CPI and PPI data.
    11 Aug · 9:00 PM
  • Euro futures held near 7-week highs ahead of key CPI and PPI data.
    11 Aug · 9:00 PM
  • Japanese Yen futures fell as unexpected trade deficit weighed.
    10 Aug · 10:10 PM

How It Developed

The DTCC is piloting tokenised US Treasuries.
This initiative could shorten settlement cycles.
The pilot may enable 24/7 repo markets.
Tokenised Treasuries aim to improve cash efficiency for trading firms.

Sources

T1
Rapid-fire repo raises hopes of cheaper, faster tradingRisk.net

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