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.

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 deposits on the Swift Digital Ledger, allowing the payment to be executed over the weekend within minutes.

Traditional cross-border payments can take up to two business days, DBS said. By completing the transfer on a Saturday, the banks avoided delays caused by different time zones and the closure of conventional payment systems.

Tokenized payments do not guarantee 24/7 finality

Kirkley distinguished between a payment appearing as completed on a digital ledger and all related claims reaching final legal settlement. While the first can happen within minutes, the second may depend on funding and reconciliation processes that still operate through conventional banking systems.

"I think the important distinction here is between seeing a payment complete on a digital ledger and knowing that every obligation underneath it has reached final legal settlement," Kirkley told crypto.news.

He said the DBS-Citi payment was important because it demonstrated that tokenized commercial bank money could move internationally over a weekend. Public disclosures, however, do not provide enough information to determine whether every underlying obligation became final at the exact moment the ledger recorded the transfer.

If any part of the payment must be funded or reconciled after traditional banking systems reopen, Kirkley said the transaction would demonstrate 24/7 money movement without necessarily delivering 24/7 finality.

Tokenized deposits represent claims against the banks that issue them. Unlike independent stablecoins, they remain commercial bank liabilities recorded on a digital ledger, allowing existing deposit money to move through programmable payment systems.

Settlement finality concerns whether the completed transfer is legally unconditional and cannot be reversed. For banks, it also requires certainty that the obligations created between participating institutions have been discharged, rather than left for later reconciliation.

Weekend payments could require more idle liquidity

Access to liquidity presents another challenge because the payment rail can remain open when central bank settlement systems are unavailable. Fedwire, the Federal Reserve's high-value payment service, does not currently offer continuous weekend operations.

Banks unable to replenish central bank money during those periods may need to fund tokenized payment systems in advance. Another option would involve holding larger liquidity buffers to cover possible customer transfers until traditional settlement infrastructure reopens.

"Liquidity does not suddenly become unlimited just because the payment rail stays open," Kirkley said. "If banks cannot access or replenish central-bank money over the weekend, then yes, the immediate options are some combination of pre-funding and larger liquidity buffers."

Both options can become costly when banks must hold balances across several currencies, networks and jurisdictions, he added. Money reserved for possible weekend payments cannot be deployed as efficiently elsewhere, leaving institutions to weigh faster transfers against the cost of keeping additional capital available.

Kirkley said a longer-term system would need to give institutions a clear view of their available liquidity and allow them to direct funds to the places where they are needed. Such coordination could reduce the need to leave separate pools of money unused across disconnected systems.

"If we make payments instant but require significantly more trapped liquidity to support them, we have solved one problem by creating another," he said.

The issue carries particular weight for dollar payments because the U.S. currency appears on one side of 89.2% of global foreign exchange trades. Tokenized markets may continue operating on Saturdays and Sundays, but institutions could have limited access to the dollar funding and central bank money needed to support their activity.

Foreign exchange pricing also becomes harder when payments continue during periods of limited market activity. Although digital payment infrastructure can stay online, the underlying FX market does not retain the same trading depth throughout the weekend.

Kirkley said a bank or liquidity provider must carry the exposure if a tokenized payment uses an exchange rate that differs from the price available when conventional markets reopen.

"Banks and liquidity providers are going to have to price that reality in, whether that comes through wider spreads, dynamic pricing or another mechanism for compensating whoever is carrying the exposure," he said.

A sharp currency move before markets reopen could create a loss for the party that guaranteed the weekend exchange rate. Kirkley said transaction terms should make it clear in advance who carries that risk and how the price accounts for it.

Growing institutional activity during off-hours may eventually add market depth and narrow spreads, he added. Current weekend liquidity, however, has not yet reached that stage.

For corporate clients, the payment model could still provide faster access to working capital. Companies could pay suppliers, transfer money between subsidiaries or respond to unexpected funding needs without waiting for banks in several jurisdictions to reopen.

DBS cited rising demand from companies operating in round-the-clock industries, including e-commerce and digital services. A survey commissioned by the bank found that 50% of finance leaders were exploring blockchain-based tools for liquidity and FX management.

Citing research from Money20/20 and FXC Intelligence, DBS said outbound cross-border payments from Asia could rise from $13.5 trillion in 2025 to $24 trillion by 2033.

Interoperability becomes critical when a transaction includes assets held on separate networks. A tokenized security, the deposit used to pay for it, and the liquidity supporting the trade may each sit in a different system.

Atomic settlement requires both sides of such a transaction to complete together. If one part fails, the other must not proceed, preventing one participant from delivering an asset without receiving payment.

"I think you need an orchestration layer that can coordinate those different systems, confirm that the assets and liquidity are actually available and make sure one leg cannot complete while the other fails," Kirkley said.

Without such coordination, he warned, financial institutions could reproduce existing market fragmentation on blockchain networks instead of removing it. Shared technical and legal standards would also be needed to establish how transactions are handled when a network stops working or one asset cannot be delivered.

Large U.S. banks are also developing systems designed to connect tokenized bank money. In August, JPMorgan Chase, Citi, Bank of America and Wells Fargo were reported to be working through The Clearing House on a shared tokenized deposit network targeted for launch in the first half of 2027.

DBS introduced DBS Token Services in 2024 to support programmable and instant transfers on its permissioned blockchain. Its services include DBS Treasury Tokens, a product designed for corporate treasury and liquidity management.

The bank is also the only Asian-headquartered member of the 12-bank core design group working on the Swift Digital Ledger's architecture. The Sep. 5 payment used that ledger to transfer tokenized deposits from Singapore to Citi's New York office within minutes.

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