BNY Mellon is building toward an always-on settlement model for U.S. Treasuries, aiming to reduce the gap between around-the-clock trade execution and business-hours settlement. The bank has begun assembling the cash, custody and digital-asset infrastructure needed to move both cash and bonds during nights, weekends and holidays.

According to Bloomberg reporting and company updates, BNY has facilitated an after-hours Treasury transaction, told clients it plans tokenized-Treasury pilots by the end of 2026, and set a target of offering 24/7 settlement for both conventional and tokenized Treasuries in 2027. The effort comes as institutions test tokenized cash, permissioned networks and delivery-versus-payment, or DvP, workflows outside traditional market windows.

The push matters because Treasuries are used not only as investment instruments but also as collateral across repo, derivatives margining, money market funds and global liquidity management. Extending settlement hours therefore affects more than trade processing; it changes how institutions can fund, hedge and reconcile positions when markets move outside the U.S. business day.

The roadmap has several components. BNY added institutional-grade USDC enablement to its digital asset custody service, allowing clients to store, transfer, mint and burn USDC directly from custody, according to a BNY press release. In June 2026, the bank launched 24/7 U.S. dollar book transfers, giving clients weekend and holiday access to USD movements inside BNY’s own ledgers, according to its Q2 2026 earnings call transcript. Separately, Tradeweb executed a real-time on-chain U.S. Treasury transaction on the Canton Network, settling against tokenized cash known as USDCx, with participants including Franklin Templeton and Virtu, according to Tradeweb.

The first users of round-the-clock Treasury settlement are likely to include dealers, market makers, money market funds, basis desks, FX-hedged buyers and tokenized funds that need atomic DvP outside normal market hours. The main obstacles include integration with existing clearing systems such as FICC, regulatory requirements, weekend liquidity and interoperability between tokenized and conventional settlement rails.

What 24/7 Treasury settlement means

Most Treasury settlement today depends on systems that operate during business hours. A trade can be agreed outside those hours, but the actual exchange of securities for cash — delivery versus payment — generally occurs inside weekday settlement windows. Market participants manage the delay with credit lines, margin, repo arrangements and operational procedures.

A 24/7 settlement model seeks to reduce that gap. If a participant buys a note at 10 p.m. on a Saturday, the objective is for cash and securities to exchange in close to real time with finality, rather than remain pending until Monday.

There are two main paths. The conventional path extends connectivity to existing securities ledgers and clearing systems so they can instruct and reflect final movements outside standard business hours. The tokenized path represents Treasuries and cash on continuously operating ledgers, allowing atomic settlement, where both legs finalize or neither does.

BNY’s plan spans both approaches. The bank is signaling services for both conventional Treasuries and tokenized versions, an important distinction because Treasury market balances are unlikely to move entirely to tokenized rails at once. Incumbent systems are expected to continue handling a large share of activity for some time.

BNY’s roadmap from after-hours to always-on

2026: pilots and infrastructure

Earlier in 2026, BNY facilitated an after-hours Treasury transaction and told clients it planned tokenized-Treasury pilots by year-end 2026, with 24/7 settlement services targeted for 2027, according to Bloomberg. Around the same period, the bank enabled 24/7 U.S. dollar book transfers in June, allowing clients to move USD across weekends and holidays within BNY’s ledgers, according to a transcript of its Q2 2026 earnings call.

That cash capability is central to the broader settlement effort. If dollars cannot move outside business hours, the securities leg cannot settle on a fully round-the-clock basis. In late June, BNY expanded its relationship with Circle so institutional clients could store, transfer, mint and burn USDC directly from BNY’s digital asset custody platform. The arrangement embeds stablecoin capabilities in the same custody environment where institutions can maintain other assets.

2027: scaling beyond pilots

If BNY meets its 2027 target, 24/7 settlement would move beyond demonstration activity and become an operational service linking cash, custody and, where applicable, tokenized representations of Treasuries. The major open questions are how deeply the service will integrate with clearing providers and how much trading volume will shift to round-the-clock workflows in the early phase.

The cash leg: USDC inside custody

Cash is the easier part of a 24/7 settlement structure when it is represented as a token that can move at any hour under institutional controls. USDC is part of that approach. By supporting minting and burning of USDC from institutional custody, BNY gives clients a way to access programmable dollar settlement without first moving assets to an external exchange or wallet.

Two features are important for institutional use. First, custody-native controls allow policies, approvals, whitelists and audit trails to remain in the environment where risk teams already operate. Second, interoperability options allow USDC or variants such as USDCx to connect with permissioned networks used by institutions, enabling DvP with tokenized Treasuries.

Tradeweb’s Canton Network transaction provided a live example. The company ran a synchronized on-chain settlement of a U.S. Treasury against tokenized cash, USDCx, with Franklin Templeton and Virtu participating. The transaction demonstrated that the cash and securities legs can finalize atomically outside traditional settlement windows.

For institutions, the stablecoin element is not framed as a retail crypto wallet process. It is intended to operate through permissioned flows, bank-grade custody policies and controlled transfer procedures.

The securities leg: conventional and tokenized Treasuries

The more difficult leg is the bond itself. Conventional Treasuries sit on established systems that do not operate continuously. Tokenization can represent a Treasury on a ledger that does not close, but that structure requires legal clarity on the representation and alignment with custodians and clearing counterparties.

BNY’s plan addresses both categories. Rather than requiring an immediate migration to tokenized rails, the bank is pursuing ways to support tokenized representations where available while also extending the operating window around conventional holdings. The after-hours transaction BNY facilitated suggests existing workflows can be stretched before full tokenization becomes available across the market.

Operational preparations over 30, 60 and 180 days

Institutions considering 24/7 Treasury settlement need to assess existing plumbing before relying on always-on workflows.

Over the first 30 days, firms can inventory where their USD sits over weekends and identify which accounts can settle internally on a 24/7 basis. They can also identify custodial venues capable of handling both securities and tokenized cash under one policy structure. Approval processes for night, weekend and holiday movements should be documented, especially where only limited staff are available.

Over 60 days, firms can test sandbox flows. That includes minting and burning USDC under custody controls, reconciling books and reports without manual fixes, and simulating a Saturday DvP workflow covering confirmation, funding, settlement and reconciliation. Exception procedures should cover stuck transfers, counterparties that do not complete their leg and network maintenance periods.

Over 180 days, legal and risk teams can update counterparty agreements to reference 24/7 settlement windows and atomic DvP where supported. They can define collateral eligibility for tokenized instruments, including any haircuts related to weekend liquidity, and work with clearing brokers on how 24/7 movements will report into existing netting and margin cycles.

Night and weekend operations also require real-time observability. Treasury, operations and risk teams need dashboards and event feeds that reflect activity as it occurs, rather than relying on reports generated after the next business opening.

Risks in an always-on market

Round-the-clock settlement does not eliminate risk. It changes where risk appears.

Weekend liquidity is one issue. If a desk can settle at 2 a.m., counterparties and market makers must also be able to quote, hedge and warehouse risk at that time. Thin liquidity can mean wider spreads and more slippage.

Stablecoin dependency is another. Tokenized dollars introduce issuer and operational risks. Mint and burn windows, blacklist controls, chain availability, depegs and circuit breakers become first-order considerations.

Interoperability gaps can also create timing mismatches. If one leg settles on-chain while the other remains off-chain until Monday, participants may face interim exposure. Atomic DvP reduces that risk only where both legs can finalize.

Settlement finality may also move faster than reporting cycles. Books can change at midnight while risk, accounting, P&L, VAR and collateral systems update later. That delay can leave management without a current view for hours.

Cybersecurity and operational coverage become more important when rails are always available. Incident response cannot be limited to weekday staffed periods, and firms may need to conduct resilience tests during low-staff hours.

Regulatory auditability is also central. As firms use more venues, they need stronger evidence trails covering approvals, timestamps, reconciliation and, where relevant, on-chain records.

A staged rollout can focus first on flows where weekend delays create the most operational pressure, such as collateral top-ups, basis unwinds and money market fund share redemptions, before attempting to make all activity operate continuously.

Potential market-structure effects

Always-on settlement is an operational change that could alter some trading behaviors.

If desks no longer need to price in multiple days of settlement risk over long weekends, pricing around those periods could tighten. Collateral chains that now stop on Fridays could continue moving, potentially reducing fails, while also requiring desk policies to define hard stop times and prevent constant small adjustments.

ETF and authorized participant mechanics could also be affected. Faster DvP may help align cash creations and redemptions with Treasury baskets during off-hours events, reducing gaps after macroeconomic headlines. Funds that already tokenize shares could match subscriptions and redemptions with tokenized Treasuries and cash. Tradeweb’s Canton Network transaction indicates one possible direction for those workflows.

Global handoffs may also change. Desks in Asia and Europe often manage U.S. weekend risk before New York markets reopen. 24/7 DvP could allow non-U.S. desks to square positions without waiting for standard U.S. settlement windows.

These changes do not guarantee lower costs. If settlement can occur at any time, firms still need controls to avoid paying elevated spreads during thin liquidity periods. Policies and execution limits are likely to be as important as the settlement infrastructure itself.

Clearing and regulation

BNY can offer 24/7 services, but the Treasury market depends on multiple infrastructure providers. Central clearing for Treasuries is expanding under SEC rules, with phased compliance into 2026. As more activity routes through FICC and standardized workflows, any always-on service must connect with those processes rather than operate around them.

Several models may coexist. In an internal DvP model, both legs sit with the same custodian or network, enabling atomic swaps and immediate records. This is well suited to pilots and controlled counterparties. In a hybrid bridge model, tokenized representations settle instantly and then reconcile into conventional records at the next available window, creating interim exposure that must be managed. In a full conventional extension model, after-hours instructions post to incumbent ledgers when settlement windows open, reducing timing uncertainty but not providing true 24/7 finality unless the core systems extend their hours.

Regulators are likely to focus on transparency, fail rates, liquidity during stress and the treatment of tokenized instruments under capital and custody rules. For institutions, permissioned networks with clear KYC, sanctioned-entity screening and audit logs may offer a more controlled route than open-ended settlement arrangements.

Providers may be asked to show full evidence for weekend DvP, including controls, timestamps, on-chain proofs where used, and reconciliation into books and records. Without that evidence, a settlement workflow may not be ready for institutional use.

Weekend scenarios

One scenario involves a late-Friday macro headline. A firm may need to rotate into short-duration bills and post margin. With always-on tools, it could mint USDC from custody, buy tokenized bills on a permissioned network and complete atomic DvP within minutes. By Sunday, its VAR could be back within limits. Risks remain if liquidity is thin or if internal P&L systems do not update until Monday. Weekend notional caps and real-time dashboards can help manage those issues.

A second scenario involves a repo unwind that hits a counterparty’s internal cutoff. If a custodian supports 24/7 USD transfers, the firm may still move cash and collateral internally to manage exposure until the counterparty’s systems reopen. BNY has noted this 24/7 USD capability. If the securities leg cannot finalize, however, the firm is relying on internal offsets, making legal agreements and weekend haircuts important.

Questions for providers

Institutions evaluating 24/7 Treasury settlement providers may ask when the last weekend DvP completed on the provider’s stack and request timestamps for each step. They may also ask whether USDC can be minted or burned in custody, which chains or permissioned networks are supported, and which Treasury instruments can settle on a 24/7 basis.

Other questions include how the provider evidences finality, how weekend settlements reconcile with clearing and margin processes on the next business day, who approves after-hours movements, and whether the platform supports MPC, hardware enclaves or dual approvals. Firms may also ask what happens if a network is under maintenance during a critical period, whether pricing changes based on hour-of-day liquidity, and whether weekend support carries additional fees.

Frequently asked questions

What is BNY targeting for 2027?

BNY has told clients it plans to offer 24/7 settlement for both conventional and tokenized U.S. Treasuries in 2027, following tokenized-Treasury pilots in 2026 and an after-hours transaction earlier in the year, according to Bloomberg.

Does this require the Fedwire Securities Service to operate 24/7?

Not for every flow. Tokenized rails can support atomic DvP on permissioned networks at any hour and reconcile with conventional records later. True end-to-end 24/7 settlement on conventional rails would still depend on broader system hours.

Why is USDC involved?

USDC can make the cash leg programmable and always-on. BNY added institutional USDC services to its digital asset custody platform so clients can store, transfer, mint and burn USDC within the same control environment where they hold other assets.

Has on-chain Treasury settlement been demonstrated?

Yes. Tradeweb executed a real-time on-chain U.S. Treasury transaction that settled against tokenized cash, USDCx, on the Canton Network with institutional participants, demonstrating synchronized settlement beyond normal hours.

Who may benefit first?

Early beneficiaries may include dealers, market makers, funds that need to post collateral on short notice, tokenized funds seeking atomic DvP and global desks managing risk across time zones.

What are the main risks?

Weekend liquidity can be limited, stablecoin rails introduce issuer and operational risks, and mismatches between tokenized and conventional ledgers can create timing exposure. Strong controls, clear procedures and real-time monitoring are essential.

Will costs fall?

Some weekend premiums could narrow, but thin trading hours can be expensive. Net costs will depend on provider pricing, after-hours liquidity and the availability of counterparties.

Disclaimer: This article is provided for informational purposes only. It is not intended as legal, tax, investment, financial or other advice.