Tokenized Collateral: The Funding Layer Unlocking 24/7 Corporate Payments Liquidity
Tokenized Collateral: Funding 24/7 Corporate Payments
Stablecoins and tokenized deposits are extending corporate payments beyond conventional banking hours. But delivering a spendable balance still requires liquidity in the right currency, at the right institution, when the payment arrives.
In our previous Strategic Edge, Visa and Mastercard: Stablecoin Treasury Payments and Liquidity Economics, we examined three functions required to complete a cross-border treasury payment: moving stablecoin value, orchestrating payment obligations and delivering usable fiat liquidity into the recipient’s bank account.
The third function presents a particularly demanding commercial challenge.
STRATEGIC EDGE INSIGHT Stablecoins and tokenized deposits extend payment activity 24/7. Tokenized collateral could fund the liquidity behind those payments with profitability shaped by financing duration and revenue capture. |
Stablecoins can move $50 million in seconds. Payment networks can recognise the funding and coordinate the payout. But a bank or specialist liquidity provider must still deliver approximately £37 million into a UK corporate’s bank account at 6:30 p.m. on Friday.
Keeping an extra £37 million in cash available for potential payouts ties up liquidity. To compete profitably, financing providers need alternatives that allow them to mobilise yield-bearing securities when fiat liquidity is required.
Tokenized collateral could provide a funding layer for 24/7 corporate payments, allowing banks to borrow against eligible Treasuries or money market fund shares when stablecoin and tokenized-deposit payment flows create a need for liquidity.
Providers compete on funding duration and liquidity cost. The funding instrument and settlement arrangements shape the bank’s liquidity, counterparty exposure and balance-sheet requirements.
BNY and Citadel Securities’ tokenized Treasury repo workflow demonstrates an important connection between accelerated securities settlement and secured financing. Separately, ISDA and ESMA are examining frameworks that could support broader use of tokenized collateral.
Together, these developments point towards a more flexible funding model for corporate payments. This note examines five questions:
What did BNY and Citadel demonstrate, and what would enable 24/7 continuous, by-the-minute secured financing?
How do financing duration and revenue allocation determine the economics of a corporate payout?
Where do ISDA and ESMA’s initiatives help turn tokenized assets into acceptable collateral?
Which institutions are best placed to use tokenized Treasuries or tokenized MMFs?
How could continuous interbank cash settlement improve the model—and which balance-sheet constraints remain?
1. BNY and Citadel: Towards 24/7 Continuous, By-the-Minute Financing
On 13 October 2026, BNY announced a tokenized US Treasury triparty repo workflow involving Citadel Securities.
Citadel Securities bought a two-year US Treasury through BNY on Tradeweb. BNY recorded a tokenized representation on its private ledger and completed settlement within minutes. Citadel then used the security to obtain overnight cash financing from BNY through a triparty repo arrangement.
In practical terms, the workflow shortened the journey from buying a security to borrowing against it.
That matters because a security cannot support a payout simply by sitting in an investment portfolio. It must be available, accepted as collateral and exchanged for cash the bank can use.
Banks already borrow against securities during the day
Eligible banks can already obtain intraday liquidity from the Bank of England against high-quality collateral.
The purpose is straightforward: a bank’s outgoing payments can fall due before its incoming payments arrive. Central bank liquidity helps it bridge that timing gap and settle payments during the day.
But access depends on eligibility, collateral and the settlement system’s operating arrangements. It does not establish a commercial repo market available to any institution, in any currency, throughout evenings and weekends.
The next proposition: continuous financing for the actual time borrowed
BNY’s demonstrated workflow was overnight financing. The next proposition is 24/7 continuous, by-the-minute secured financing: obtain cash when needed and repay when incoming settlement proceeds arrive.
That requires:
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