Always-on settlement: what BNY's 24/7 Treasury plan means for institutional funds

The week of 20 to 26 July 2026 confirmed that tokenised, round-the-clock market infrastructure is no longer a pilot concept. Fund managers, directors and operations teams should begin preparing now.

Executive summary

The most important development of the week was not a price move or a legislative vote. It was a series of infrastructure announcements confirming that the settlement layer of institutional finance is being rebuilt. BNY, one of the world's largest custodians, set out a path to 24/7 settlement of conventional and tokenised US Treasuries by 2027, following a successful after-hours settlement test. DTCC's tokenisation pilot moved into limited production with more than 50 institutions. The USD 4.2 billion acquisition of Equiniti by Bullish, designed to create a global transfer agent for tokenised securities, cleared competition review in the UK, US and Germany on 24 July.

For hedge funds and digital asset funds, this matters at the level of daily operations: collateral mobility, margin timing, NAV cycles, custody arrangements and counterparty risk frameworks are all built on the assumption that markets close. That assumption is now being unwound by the institutions that operate the plumbing itself. Cayman, which brought a statutory tokenised funds framework into force in March 2026, is positioned as the natural fund domicile for this transition, and managers should treat the operational and governance implications as a current agenda item rather than a future one.

Background

For most of the post-war period, the settlement of securities has been bounded by business hours, batch cycles and national payment systems. US Treasuries, the deepest and most systemically important market in the world, settle through infrastructure that closes in the evening and at weekends. Digital asset markets, by contrast, have always traded and settled continuously.

The two systems have been converging for several years. Tokenised money market funds and Treasury products emerged as institutional cash management tools, with aggregate value in tokenised US Treasury products now estimated at roughly USD 14.6 billion across the leading platforms. Stablecoin legislation in the United States, in the form of the GENIUS Act, created a federal framework for payment stablecoins and pushed reserve management into the regulated banking and custody perimeter. What had been missing was commitment from the core market infrastructure providers, the custodians, depositories and transfer agents, to operate the traditional rails on a continuous basis.

What happened this week

Three developments stood out.

First, Bloomberg reported on 22 July, with further detail from CoinDesk on 23 July, that BNY is laying the groundwork to offer around-the-clock settlement for US Treasuries, targeting 2027 for both conventional and tokenised instruments. The bank completed an after-hours test in which Treasury transactions were settled after the Federal Reserve's Fedwire Securities Service had closed for the day. The test involved stablecoin reserve activity, and BNY also indicated it plans to begin piloting tokenised Treasuries on a private blockchain by the end of 2026.

Second, on 24 July, Bullish announced that its USD 4.2 billion acquisition of Equiniti, the share registration and transfer agency business, had obtained the required competition clearances in the UK, US and Germany, keeping the transaction on track to close in early 2027. The strategic logic is explicit: to combine a regulated exchange group with a global transfer agent and registry capability and to position for tokenised securities issuance, record-keeping and servicing at institutional scale.

Third, DTCC's tokenisation initiative, which began limited production trades of tokenised assets on 15 July with participation from more than 50 institutions including the largest global asset managers and dealers, continued to build towards a full commercial launch planned for October 2026. Eligible assets include Russell 1000 securities, US Treasuries and major index ETFs.

Around these anchor stories, the regulatory calendar was dense. The OCC's comment period on proposed GENIUS Act rules extending AML and sanctions obligations to stablecoin issuers closed on 24 July. The CFTC's consultation on 24/7 trading and perpetual-style derivatives closes on 27 July. The SEC's published 2026 agenda targets proposed rulemakings on crypto asset offerings, broker-dealer custody and capital treatment, and crypto market structure amendments.

Why institutions care

Settlement hours sound like a technical detail. They are not. The entire institutional operating model is built on the market close.

Margin calls are computed and met on daily cycles. Collateral is mobilised during business hours in the relevant time zone. Fund NAVs are struck at defined valuation points. Custody reconciliations, cash sweeps and payment cut-offs all assume a pause in activity. When the most important collateral asset in the world, the US Treasury, becomes transferable at any hour of any day, each of those conventions becomes a choice rather than a constraint.

Institutions also care because the participants have changed. This is no longer a story about crypto-native firms building parallel infrastructure. It is the incumbent depository, one of the largest global custodians, the largest asset managers and the major dealers re-engineering the core rails. When infrastructure providers of this size commit capital and regulatory attention to always-on settlement, the question for fund managers stops being whether the transition happens and becomes how quickly their own operating models must adapt.

Operational implications

For hedge fund and digital asset fund managers, the practical consequences arrive through service providers first.

Collateral and treasury management will move fastest. Tokenised Treasury products already allow cash-like assets to move outside banking hours, and BNY's roadmap suggests conventional Treasuries will follow. Managers running derivatives, repo or leverage should expect prime brokers and clearing firms to begin offering, and eventually expecting, out-of-hours collateral movement. That has direct consequences for how treasury functions are staffed and automated.

Fund administrators will need to handle instruments that never stop trading. Digital asset managers already operate with 24/7 markets and periodic NAVs; traditional managers will increasingly face the same mismatch. Valuation points, cut-off times and dealing deadlines in offering documents were drafted for a world with a market close. Managers should review whether their documents give sufficient flexibility for changed settlement conventions.

Counterparty risk monitoring becomes continuous. A weekend is currently a pause; in an always-on settlement world it is market time. Incident response, wallet governance and payment authorisation frameworks, familiar territory for digital asset funds, become relevant to any fund whose assets or collateral move continuously.

Governance implications

Boards should treat settlement modernisation as a governance topic, not only a technology one.

Directors of funds holding tokenised instruments need to understand where the register sits, who controls it, what happens on operational failure and how the fund's rights are evidenced. The Bullish and Equiniti transaction is a reminder that transfer agency itself, the record of who owns what, is becoming a digital, competitive and consolidating business.

Boards should also ask how the manager's operational due diligence on custodians and administrators addresses tokenised asset support, out-of-hours controls and key management. Valuation and liquidity policies approved by the board may need refreshing where dealing and settlement conventions change. None of this requires a board to become technologists; it requires the same discipline boards already apply to any material change in the fund's operating environment.

Regulatory implications

The regulatory picture this week was one of construction rather than conclusion.

In the United States, GENIUS Act implementation is in full swing, with the OCC consulting on extending AML and sanctions standards to stablecoin issuers. The CFTC is consulting on 24/7 trading and perpetual-style contracts in regulated derivatives markets. The SEC's 2026 agenda commits it to proposed rules on crypto offerings, broker-dealer custody and capital, and market structure. Against that, the CLARITY Act, the market structure legislation that would settle the SEC and CFTC perimeter, remains stalled in the Senate with a narrow window before the August recess.

In the United Kingdom, the FCA published five policy statements on 30 June setting out final rules for cryptoasset firms, with prudential guidance consultations closing on 30 July. In short, the two most important markets for institutional managers are both writing the rulebook for tokenised and digital asset activity in real time, and the direction of travel is towards regulated, bank-grade infrastructure.

Cayman implications

Cayman enters this transition from a position of strength, and the week's domicile data underlined it.

Figures published by Cayman Finance in July show total regulated funds rose by 547 in the first half of 2026 to 31,145, comprising 18,132 private funds and 13,013 mutual funds. A July survey of 180 managers by AIMA and Marex found that 56% of emerging hedge fund managers domicile their flagship fund in Cayman, up from 55% in 2024.

More significant for this week's theme, the Cayman Islands statutory framework for tokenised funds, in force since 24 March 2026 through amendments to the mutual funds, private funds and VASP legislation, has now seen 12 tokenised funds registered with CIMA. That includes a tokenised US dollar liquidity fund domiciled in Cayman by a major global asset manager, a strong signal that the framework is working as intended for institutional issuers.

The framework generally requires clear disclosure of token-specific risks, robust records of token issuance, transfer and ownership, and annual confirmations to CIMA. For managers, the message is straightforward: the leading offshore fund domicile now has a purpose-built statutory route for tokenised fund interests, precisely as the global settlement layer moves in the same direction. Specific structuring decisions remain subject to the fund's documents, applicable law and advice from Cayman counsel.

Digital asset implications

For digital asset managers, the week validated the institutional thesis. The infrastructure conventions of digital asset markets, continuous settlement, tokenised instruments and programmable transfer, are being adopted by the core of traditional finance rather than displaced by it.

That cuts two ways. It expands the opportunity set: tokenised Treasuries and money market instruments are becoming standard collateral and cash management tools for digital asset strategies, and regulated venues are extending derivatives access. It also raises the bar: as banks, depositories and transfer agents industrialise tokenised operations, allocators will expect digital asset funds to demonstrate custody, governance and operational controls of equivalent quality.

Risks

Several risks deserve attention. Legislative failure in Washington before the August recess would prolong classification uncertainty into 2027 and could slow allocation decisions. Always-on settlement concentrates operational risk in fewer, larger infrastructure providers, and outages or key management failures outside business hours are harder to staff. Fragmentation risk is real: multiple private blockchains, depositories and transfer agents could produce a patchwork of standards before interoperability emerges. Finally, funds that move early into tokenised wrappers without disciplined disclosure, valuation and record-keeping expose themselves to regulatory and investor scrutiny that a conventional structure would not attract.

Opportunities

For managers, the opportunities are equally concrete. Treasury and collateral efficiency gains from tokenised cash instruments are available now. Early, well-governed use of the Cayman tokenised funds framework can differentiate a manager with allocators who want tokenised access inside a regulated wrapper. Funds with genuine 24/7 operational capability, which digital asset managers have been forced to build, hold an advantage as traditional settlement hours extend. And for allocators, infrastructure modernisation should, over time, reduce settlement risk and improve transparency across the market.

Looking ahead

Watch four things over the coming weeks. First, whether the CLARITY Act reaches the Senate floor before the recess, and if not, how the SEC and CFTC use their rulemaking agendas to fill the gap. Second, the CFTC's next steps on 24/7 trading and perpetual-style contracts after the 27 July comment deadline. Third, DTCC's progression from limited production towards its planned October commercial launch. Fourth, further tokenised fund registrations in Cayman, which will indicate how quickly institutional issuers adopt the new framework.

Key takeaways

• BNY's plan for 24/7 US Treasury settlement by 2027, tested after Fedwire hours, signals that always-on settlement is moving from concept to roadmap at the core of traditional finance.
• DTCC's tokenisation pilot is in limited production with more than 50 institutions, targeting full commercial launch in October 2026.
• Competition clearances for the Bullish and Equiniti transaction point to transfer agency and registry infrastructure being rebuilt for tokenised securities.
• The regulatory rulebook is being written now: GENIUS Act implementation, CFTC consultation on 24/7 trading, three SEC crypto rulemakings and the FCA's new cryptoasset regime.
• Cayman's tokenised funds framework has 12 registered funds since March 2026, and Cayman's overall fund count passed 31,000, reinforcing its position as the default institutional domicile.
• Managers should review offering document flexibility, treasury staffing, custody arrangements and board oversight now, before changed settlement conventions arrive through their service providers.

Conclusion

Market infrastructure changes slowly, then all at once. The week of 20 to 26 July 2026 will not be remembered for a single headline, but it may be remembered as the point at which the world's core custodians, depositories and transfer agents committed publicly to an always-on, tokenised settlement model. For fund managers, the sensible response is neither hype nor delay. It is to treat settlement modernisation as an operational and governance workstream with a defined owner, and to structure new products in domiciles whose regulatory frameworks have already anticipated the change.

CV5 Capital is the Cayman-headquartered institutional fund infrastructure platform for hedge fund and digital asset managers who need to launch quickly, operate properly, and satisfy serious investors from day one. Managers considering tokenised or digital asset strategies within a regulated Cayman structure should speak with our team before committing to structure, service providers or timeline.

This article is for general information only and does not constitute legal, regulatory, tax, or investment advice. Fund managers should obtain advice based on their specific structure, investors, strategy, and regulatory obligations. CV5 Capital is registered with the Cayman Islands Monetary Authority (Registration Number 1885380, LEI 984500C44B2KFE900490).