The Treasury Desk That Never Closes

2 hours ago

4 min read

What 24/7 Settlement and Tokenized Deposits Mean for

Bank and Credit Union Liquidity

Markets trade around the clock. Most treasury desks still close at five.

That gap used to be a nuisance. As settlement cycles compress and the largest banks rebuild custody and payments for an always-on market, it is becoming a liquidity risk. Global Finance's October issue puts it plainly: markets trade 24/7, while custody and payment rails keep banking-window hours, and trades that need prefunding now need real-time liquidity optimization to avoid settlement fails.

For banks and credit unions, this story has two sides. Your clients are asking for faster rails. And your own treasury team has to keep placing cash, managing counterparties and answering examiners while the clock speeds up.

The numbers behind the headline

18% of community banks plan to launch tokenized deposit products within the next 12 months. About 60% expect stablecoin-driven deposit erosion to have a moderate or significant impact on their balance sheets.

Up to $1.3 trillion in bank deposits could be drained by yield-bearing payment stablecoins, with lending reduced by about $850 billion, according to Independent Community Bankers of America (ICBA) research.

Wells Fargo says its tokenized deposits will let corporate and commercial clients "move, program, and settle funds 24/7/365" once fully deployed. The first release is limited to select clients and USD-to-GBP transactions this fall, with a broader rollout through 2027.

Who is moving

The large institutions are not waiting for the industry to agree on a standard.

• Citi is building Custody+, a modular platform for an always-on economy, and a patented Single Event Processing technology that compresses timelines for income events, corporate actions and tax processing, which gives clients earlier access to liquidity.

• DBS has offered blockchain-based token services since 2021 for real-time, multicurrency liquidity and automated treasury actions.

• BNY is using a unified omnibus architecture and distributed ledger technology for microsettlements and real-time collateral movement outside standard clearing hours.

• J.P. Morgan's Kinexys lets asset managers pledge tokenized money market shares as collateral over a weekend.

• Wells Fargo is extending tokenized deposits to its corporate and commercial treasury clients.

Why this is a finance problem

It is tempting to read this as a technology story for the largest banks. For a community bank or credit union, it is a balance sheet story.

If corporate clients can hold programmable money that moves at any hour, they will compare where it sits more often, and with less friction. The same speed that helps a large bank retain deposits lets balances leave faster. The ICBA and CSBS figures above show how seriously smaller institutions take the risk. Tokenized deposits are one defense on the product side. They do not answer how an institution prices, places and documents its own cash.

There is also a gap that faster rails do not close. Settlement can run all night. A placement decision that depends on phone calls, spreadsheets and business hours still waits for the morning. Speed raises the cost of delay, and it raises the need for limits, approvals and an audit trail that work at any hour, not just when the right person is at their desk.

Examiners will ask the same questions they ask today: why was cash placed there, within which limits, and who approved it. A faster payment rail does not write that record for you.

What a treasury team controls today

Settlement will modernize at its own pace, driven by the largest institutions and by regulation. A treasury team cannot set that timeline. It does control three things now:

1. How fast it can see its position. Balances, maturities and counterparty exposure in one view, not stitched together at month-end.

2. How defensibly it compares counterparties. A documented, repeatable comparison of quotes, not a handful of calls to the usual names.

3. How well it can prove the decision. Limits, approvals and the reason for each placement, recorded as the decision is made.

Those are the four steps we use with every client: See it. Compare it. Place it. Prove it. They are the same whether cash settles in a day or in seconds.

To be clear about what Likwidity is and is not: we are a decision layer, not a settlement rail. Likwidity is non-custody software. We do not hold funds, settle transactions or issue tokenized assets. We help treasury teams see their cash, compare quotes from 10+ banks, place it according to policy, and keep the record. When settlement gets faster, that is the part of the process that has to keep up.

The takeaway

The desk that never closes will not be staffed around the clock. It will be a process that runs to your limits at any hour and leaves a record a person can review in the morning.

Start with three questions:

• How long does it take your team to re-test where your cash earns the most?

• If a large depositor moved balances tonight, what would your response process look like tomorrow at 8 a.m.?

• Could you show an examiner why each placement was made, within which limits, and who approved it?

If the answers depend on one person's calendar, the rails are not your biggest constraint.

The bottom line

Faster rails are coming either way. The question for banks and credit unions is whether your cash-placement decision moves at the same speed, and leaves a record.

Find out how exposed your cash is with the Likwidex risk score, or schedule a demo with Likwidity.

Likwidity. Intelligent Liquidity, Automated.