BNY Mellon will begin testing tokenized U.S. Treasuries on a private blockchain by the end of this year. The bank also plans to expand its settlement network to cover more international trading hours, targeting the weekend lag that has long plagued Treasury markets. The move signals growing institutional interest in using blockchain to streamline one of the world's most liquid asset classes.
Inside the tokenization test
BNY will run the pilot on a private blockchain, not a public network. That means only approved participants will have access — a design choice that keeps the system within regulatory guardrails while still testing the efficiency gains of tokenization. The test is set to begin before 2026 ends, though the bank hasn't said exactly when.
Tokenized Treasuries would represent ownership of government debt as digital tokens, allowing for near-instant settlement and 24/7 trading. For BNY, which already handles trillions in custody assets, the pilot is a way to see if the technology can reduce operational friction without blowing up existing infrastructure.
Closing the weekend gap
Separately, BNY plans to extend its settlement network to cover more hours across international time zones. The goal: eliminate the weekend lag that forces Treasury trades to sit unsettled from Friday to Monday. That delay creates counterparty risk and ties up capital. By expanding settlement hours, BNY hopes to make the market more continuous — a change that would benefit Asian and European traders who currently face a gap when U.S. markets are closed.
The timing isn't accidental. Tokenization and extended settlement hours complement each other. A tokenized Treasury that settles in minutes is less useful if the network only runs during New York business hours. BNY appears to be building both pieces in parallel.
BNY hasn't disclosed which clients will participate in the tokenization test or how large the pilot will be. The bank is expected to share more details closer to launch. For now, the message is clear: one of the oldest financial institutions in the U.S. is betting that blockchain can fix a real-world pain point in the Treasury market — and it's starting to prove it.
