World’s Largest Custody Bank BNY Makes Ripple Move: 24/7 Settlements Starting in 2027

BNY, the world’s largest custody bank, aims to eliminate weekend liquidity risk by offering 24/7 settlement of U.S. Treasury bonds by 2027, following a successful test with Ripple’s RLUSD and OpenEden’s USDO stablecoins.

Traditional finance giant BNY is taking a revolutionary step to keep pace with the cryptocurrency world. The bank is developing an infrastructure to support the seamless transfer of both traditional and tokenized U.S. Treasury bonds to solve liquidity issues, particularly those known as “weekend lag.” This move aims to address reserve management disruptions, one of the biggest structural challenges in the stablecoin market.

At the core of this new plan is a successful trial conducted with Ripple and OpenEden. In this transaction, which took place outside the Fedwire Securities system’s operating hours, the transfer of bonds representing RLUSD and USDO reserves was successfully completed via Tradeweb. As the current primary custodian for Ripple’s stablecoin reserves, BNY aims to minimize the liquidity risk faced by stablecoin issuers during large-scale redemptions or margin calls.

Liquidity Risk in Stablecoin Reserves is Coming to an End

Although stablecoins are traded 24/7 in the market, the Treasury bond reserves backing these assets are often tied to weekday business hours and the traditional banking calendar. This creates a significant risk by making it difficult to convert reserves into cash during sudden market volatility. BNY’s 2027 goal promises to move the financial system toward a more secure and fluid state by making the settlement process for these assets as seamless as cryptocurrencies.

The bank will continue to test tokenized bonds on a private blockchain until the end of the year. Having introduced tokenized deposit balances for its institutional clients in January, the giant institution plans to integrate its financial power into the digital asset world, eliminating disruptions caused by time zone differences between Asian, European, and U.S. markets. This will ensure that the collateral backing stablecoins is accessible and manageable at any time.