Unlocking Collateral Mobility through Tokenization: US Treasuries Use Case
DTCC's LedgerScan connecting to Canton Network
Unlocking Collateral Mobility through Tokenization: US Treasuries Use Case
DTCC's LedgerScan connecting to Canton Network
Digital Asset, the DTCC and an industry group of investors, banks, CCPs, custodians/collateral agents and a CSD completed a successful pilot using tokenized US Treasuries (USTs) as collateral, leveraging DTCC’s LedgerScan solution to support dynamic tracking and governance of the assets involved in the pilot transactions.
The pilot proved the feasibility of more complex real-world transactions, including:
- Creation of Digital Twin for USTs: Investors asked custodians to create a digital twin of existing USTs, updating holdings instantly and setting aside equivalent real-world assets.
- Margin Call Delivery: Secured parties made margin calls using USTs as collateral, with real-time transaction status updates and instant settlement.
- Margin Call Return: Investors called for the return of margin, with collateral released and transactions settled instantly.
- Closeout Due to Default: Secured parties seized pledged assets, transferring ownership in atomic transactions, ensuring legal certainty and control.
This pilot builds on the successful Canton Network Pilot completed in December 2023, which established the foundation for composable applications across a global economic network.
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Tokenizing and mobilizing USTs as collateral
The DTCC’s LedgerScan was connected to the UST Collateral Network Pilot Platform enabling a uniform view across the different custodians and collateral agents.
To actively involve all participants, 11 distributed applications and 21 nodes were deployed, with the Global Synchronizer keeping everything in sync and enabling atomic transactions across the different applications and parties. In all, 104 cross- application transactions took place.
26 Organizations
4 Registry apps
6 Margin apps
1 Price oracle
21 Participant nodes
100+ Transactions
Tokenizing and mobilizing USTs as collateral
The DTCC’s LedgerScan was connected to the UST Collateral Network Pilot Platform enabling a uniform view across the different custodians and collateral agents.
To actively involve all participants, 11 distributed applications and 21 nodes were deployed, with the Global Synchronizer keeping everything in sync and enabling atomic transactions across the different applications and parties. In all, 104 cross- application transactions took place.
26 Organizations
4 Registry apps
6 Margin apps
1 Price oracle
21 Participant nodes
21 Transactions
“In addition to the liquidity and operational efficiencies gained, the pilot demonstrates how tokenized collateral can improve market transparency, legal certainty of ownership in seizure/close out scenarios, and significant real-world benefits, including faster collateralization and enhanced regulatory oversight”
Kelly Mathieson
Chief Business Development Officer at Digital Asset
“This pilot successfully demonstrated the power of tokenization – and its potential to enhance collateral mobility and unlock liquidity”
Nadine Chakar
Global Head of DTCC Digital Assets
“Most blockchain pilots focus on initiating or completing transactions, but in this pilot, that lifecycle was extended to include default. This is crucial because collateral isn't just about mitigating risk—it ensures that in the event of a default, secured parties can take legal possession of the collateral”
Jenny Cieplak
Partner at Latham & Watkins
Global Synchronizer
Read how the Global Synchronizer, a decentralized and transparently governed interoperability service for the Canton Network, is addressing financial industry calls for unifying infrastructure to connect, drive liquidity, and unleash the full potential of tokenized assets.
Canton Network Ecosystem
Browse the expanding ecosystem of connected applications, participants, and service providers delivering synchronized finance with Canton today.
Canton Network Pilot Report
Read about the groundbreaking blockchain pilot, where 45 leading financial institutions, asset managers, and service providers connected on the Canton Network, showcasing the exponential power of interoperable capital markets.