24/7 tokenized markets could expose a weekend dollar funding gap, GSN CEO warns

DBS and Citi have completed a cross-border dollar payment within minutes over a weekend using tokenized deposits, testing an always-on transfer system while raising questions about final settlement, liquidity and foreign exchange pricing. Summary DBS and Citi processed the Singapore-to-U.S. payment on Sep. 5 through the Swift Digital Ledger. GSN CEO Ryan Kirkley said the available information does not establish whether every underlying obligation reached final legal settlement immediately. Banks may need pre-funded balances or larger liquidity buffers when central bank money is unavailable. Limited weekend FX liquidity could result in wider spreads or other costs for institutions using 24/7 payments. According to Ryan Kirkley, CEO and co-founder of Global Settlement Network, the transaction shows that tokenized commercial bank money can travel across borders outside normal banking hours, but the information disclosed so far does not prove that every obligation beneath the payment became legally final at the same time. DBS and Citi’s New York office completed the transfer between Singapore and the United States on Sep. 5, according to a DBS announcement. The banks used tokenized dep...