Intraday repo is nothing new - it has been a key tool in financial markets for decades. Traditionally, market infrastructure supports the securities and cash for the start and end legs to settle on a Delivery versus Payment (DVP) basis within the same day.

For years, traders have relied on intraday repo to:

• Manage short-term liquidity
• Mitigate against settlement failures

It’s proven to be effective. But here’s the question: Is it dynamic enough for today’s markets?

The Limitations of Traditional Intraday Repo

Conventional intraday repo structures are typically:

• Operationally burdensome
• Constrained by agent or central bank cut-off times

The reliance on manual processes and legacy infrastructure limits the responsiveness and efficiency of traditional intraday repo.

A Game-Changer: Distributed Ledger Technology (DLT)

DLT is reshaping intraday repo - and the broader market. It's no longer theoretical; it's happening now.

We’re entering a new era of fully programmable intraday repo, enabled by:

• Smart contracts
• Tokenised assets
• Real-time digital cash settlement

What Does This Mean?

• Funding can now be sourced by the minute, rather than by the day
• Markets can operate with unprecedented agility and precision

Challenges Ahead

Digital intraday repo is not without its hurdles, some of the key challenges slowing down adoption include:

• Open regulatory and legal questions
• Operational risk, including settlement finality
• Standardising and tokenising collateral across markets
• DLT interoperability and legacy platform incompatibilities

Despite open challenges, digital intraday repo is set to transform liquidity management and market efficiency. Collaboration and innovation across the industry will be key to unlocking its full potential.

Why Is This So Relevant Now?

• Because T+1 is compressing settlement timelines
• Margin pressure is climbing
• Real-time finance is becoming the new norm

Institutions that adapt will lead - those that don't may fall behind.

💭Are you ready for the shift?

Chat with Emma Watson, Tonic’s Securities Finance Lead - she’s here to answer your questions and help you navigate what’s next.

🔗Feel free to also contact us via our website: https://www.thetonicconsultancy.com/contact

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