Treasury market efficiency refers to the ease and speed with which U.S. Treasury securities can be bought, sold, and priced, reflecting all available information. A highly efficient market exhibits tight bid-ask spreads, deep liquidity, and rapid price discovery. This efficiency is crucial for the global financial system due to Treasuries’ role as a benchmark asset. It supports stable government financing.
Context
The integration of blockchain technology and digital assets is being explored to potentially enhance treasury market efficiency, particularly through tokenization and atomic settlement. Discussions consider how distributed ledger technology could reduce settlement times and operational costs in the trading of government securities. News often covers pilot programs and research into digital treasury bonds, aiming to modernize market infrastructure.
Tokenizing Treasury shares on-chain shifts the MMF settlement layer from T+2 to T+0, enhancing institutional capital efficiency and liquidity mobility.
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