Tokenized US Treasurys Experience Massive Growth, Signaling Shift in On-Chain Finance
The market for tokenized US Treasurys has seen exponential growth, now valued at $7 billion, as institutional demand rises for on-chain yield.
Tokenized US Treasurys have transitioned from a niche experiment into a significant segment within the real-world asset market, revealing a staggering 50x growth just under two years due to increasing institutional interest in on-chain yields.
Data from Token Terminal indicates that the total market capitalization of tokenized US Treasury products has skyrocketed from below $200 million in January 2024 to nearly $7 billion by late 2025, highlighting a rapid shift towards on-chain adoption of government-backed debt instruments.
Source: Token Terminal
At the forefront of this growth is BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL), seen as the flagship offering in the tokenized Treasury sector. The blockchain-based fund provides investors with short-term US Treasury exposure while facilitating daily yield accrual and on-chain settlement. Industry reports suggest that BUIDL has attracted nearly $2 billion in assets under management.
Other notable products are USD Coin Yield (USYC) from Circle, the US Treasury Bill Token (USTB) from Superstate, and the Ondo Short-Term US Government Bond Fund (OUSG) from Ondo Finance. Each product presents regulated access to US government debt through fund structures that push for integrating traditional fixed-income assets onto blockchain platforms.
Tokenized Treasury Bills: A Gateway to Institutional DeFi
US Treasury bills are ideally suited for tokenization, merging the reliability of US government backing with the swift nature of blockchain settlements, thereby creating a regulated entry point into decentralized finance (DeFi) markets.
As previously reported by Cointelegraph, institutional adoption of tokenized Treasury bills has gained momentum, particularly regarding their application in settlement and margining. Classic financial firms utilize tokenized government debt to enhance capital efficiency while retaining access to low-risk assets.
DBS, recognized as Southeast Asia’s leading financial institution by assets, was one of the pioneering banks to trial tokenized funds, including blockchain-oriented Treasury products. The bank has embarked on pilot projects involving tokenized money market funds and government securities, aiming to leverage on-chain assets for improved collateral management and settlement efficiency.
The growth trajectory of tokenized Treasury bills mirrors that of other on-chain assets, reflecting the swift advancement of the tokenization landscape. Data from RedStone illustrates that private credit has emerged as the fastest-growing segment, driven by yields surpassing those of traditional investment options.
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