- The US tokenised treasury market reached a market capitalisation of US$2 billion, doubling in just five months.
- BlackRock’s BUIDL dominates with US$510 million. But smaller issuers have seen significant growth in the last three months, with Hashnote’s USYC growing nearly 50% to US$220 million.
- Rising US treasury yields have made tokenised treasuries appealing to institutional investors who seek traditional yields but with the benefits of blockchain technology.
The US tokenised treasury market has seen significant growth —and pretty quickly, too— reaching a market capitalisation of US$2 billion (AU$2.94 billion), just five months after hitting the US$1 billion (AU$1.47 billion) mark in March.
Related: First Ether Fund Surpasses $1 Billion in Net Inflows, While Grayscale Continues with Outflows.
According to data from RWA.xyz, BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL) leads the tokenised treasury market with nearly US$510 million (AU$749.9 million), followed by Franklin Templeton’s OnChain U.S. Government Money Fund (FOBXX) at US$428 million (AU$629.3 million).
Ondo’s U.S. Dollar Yield (USDY) has also grown considerably, currently the third largest issuer with US$330 million (AU$485.2 million).
Tokenised Treasuries: Niche Yet Promising
Tokenised treasuries represent government bonds traded as tokens on blockchain platforms like Ethereum, Solana, Tron, etc.
However, the on-chain sector remains just a fraction of the massive US$27 trillion (AU$39.7 trillion) treasury market. It looks pretty distant, but one thing is true: this performance reflects the growing interest in tokenisation products among institutional clients, which could be a window of opportunity for blockchain adoption.
While the leading funds have contributed to the market’s expansion, the graphic shows smaller issuers have expanded their growth in the last three months.
Hashnote’s USYC has grown nearly 50% in the past month, reaching a market cap of US$220 million (AU$323.5 million).
OpenEden’s TBILL followed with a 34% surge from from US$75 million (AU$119.3 million) to US$101 million (AU$148.5 million), while Superstate’s tokenised product has increased by 18%, getting closer to a market cap of US$100 million (AU$147 million).
RWAs Continue to Grow
The appeal of tokenised Treasury funds lies in their ability to offer investors exposure to rising US Treasury yields while maintaining the flexibility of blockchain transactions. Financial institutions like Goldman Sachs are already exploring the sector, noting an uptick in client interest.
Related: Goldman Sachs Reported to Launch 3 New Tokenisation Projects in EU and US in 2024
Moreover, the 10-year U.S. Treasury yield currently stands at 3.81%, a significant increase from 1.5% four years ago, while the 2-year yield has climbed to 3.92%, up from nearly zero in 2020 and 2021.
This environment has made tokenised Treasuries an attractive option for crypto investors looking to diversify and capitalise on higher yields.
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