October 28, 2025 - In a rapidly changing financial landscape, central limit order books (CLOBs) remain crucial drivers of liquidity and efficiency in the U.S. Treasury market.
U.S. Treasury CLOBs are handling an impressive average of $195 billion in daily trading volume during the first half of 2025, reflecting a significant 16% increase from the previous year. This surge illustrates the vital role CLOBs play as the backbone of the U.S. Treasury market, especially in times of heightened market volatility.

"For over 30 years, CLOBs have been at the heart of the U.S. Treasury market, providing unparalleled transparency, firm pricing and instant execution,” says Kevin McPartland, Crisil Coalition Greenwich Head of Market Structure & Technology Research and author of The evolution of the U.S. Treasury CLOB.
“Their ability to serve as a benchmark for market liquidity ensures that they remain a vital component of the financial system, especially during turbulent times.”

Nonbank Market Makers and New Competition 
The competitive landscape of CLOBs and U.S. Treasury electronic trading is evolving. While CLOBs encounter competition from alternative trading methods like dealer-to-dealer auctions and voice markets, their integration with related instruments such as futures, swaps and exchange-traded funds (ETFs) continues to attract a diverse range of market participants, including hedge funds and nonbank liquidity providers.

Looking ahead, technological advancements that will enhance CLOB functionality, such as reduced latency, smaller tick sizes and tighter integration with the broader interest-rate trading ecosystem are anticipated. Furthermore, mandatory central clearing is expected to streamline access to liquidity pools, benefiting market participants.

"The evolution of CLOBs is a testament to their adaptability and resilience. By leveraging cutting-edge technology and expanding their user base, CLOBs are positioned to deepen liquidity and create even greater opportunities for market participants. Their role in ensuring transparency and efficiency will remain critical as the U.S. Treasury market continues to evolve,” says Kevin McPartland.

The evolution of the U.S Treasury CLOB draws on proprietary data on electronic trading in the U.S. Treasury market and insights gathered from conversations with platform operators, hedge funds, nonbank liquidity providers, and top-tier banks to examine the history of CLOBs in the U.S. Treasury market, the current competitive landscape, the market’s evolution, and its likely path forward.