Bank of New York Mellon (BNY) is pushing for extended settlement hours for U.S. Treasury securities and plans to support 24/7 settlement of both traditional and tokenized U.S. Treasuries by 2027. This move targets a real limitation of the stablecoin market: while tokens can be traded 24/7, the underlying U.S. Treasury reserves remain subject to weekday settlement windows.
Post-market testing has been completed.
According to a Bloomberg report citing a letter from BNY to its clients, the bank previously completed an after-hours test trade involving Ripple's RLUSD and OpenEden's USDO reserves. The trade occurred after Fedwire Securities ceased processing secondary market US Treasury transfers that day and was executed by Tradeweb.
BNY stated that the transaction was subsequently completed through existing cash settlement channels. The securities tested were not tokenized, but the results demonstrate that operations involving US Treasury bonds related to stablecoin reserves can proceed after the main US settlement period has ended.
Tokenized US Treasury bonds to be tested by the end of this year
BNY plans to begin testing tokenized U.S. Treasury bonds on a private blockchain by the end of this year, and will expand its existing settlement network later this year to cover more trading sessions in Asia, Europe and the United States.
This means its service hours will no longer primarily revolve around the US domestic market clock, but will instead move towards continuous operation across time zones. For stablecoin issuers and institutional clients who need frequent redemptions, portfolio adjustments, or collateral replenishment, this will help reduce waiting times.
Stablecoin reserves remain constrained by traditional window constraints
Both RLUSD and USDO have short-term U.S. Treasury bonds in their reserve assets. While the tokens themselves can be traded continuously, the settlement of the underlying Treasury bonds is still subject to traditional business day schedules.
After large-scale subscriptions, redemptions, or additional collateralizations occur, this time lag may delay reserve adjustments and lengthen the cycle of funds moving between different systems. BNY's test primarily aimed to verify whether this process could continue operating after market close.
Additional information:Currently, BNY is the primary custodian of the RLUSD reserves and also provides custody and investment management services for OpenEden's tokenized US Treasury funds. In January of this year, the bank also launched a tokenized deposit balance product, providing institutional clients with an on-chain representation of commercial bank currency.
