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.
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.
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