From $200M to $7B: Tokenized US Treasurys Go Mainstream
Why Are Tokenized Treasurys Growing So Fast?
Tokenized US Treasury products have become one of the fastest-expanding segments of the real-world asset market, with data pointing to nearly 50x growth in less than two years. According to figures from Token Terminal, the combined market capitalization of tokenized Treasurys climbed from well below $200 million in January 2024 to almost $7 billion by late 2025.
The jump reflects rising demand from institutions looking for low-risk yield that settles onchain. Unlike speculative crypto assets, tokenized Treasurys give investors exposure to government-backed debt while retaining blockchain features such as instant settlement, composability, and programmable transfers.
The growth has accelerated as higher interest rates made short-dated government debt more attractive and as financial firms searched for ways to use that yield inside blockchain-based workflows.
Investor Takeaway
Tokenized Treasurys sit at the intersection of safety and efficiency, offering institutions a way to hold low-risk assets while gaining onchain settlement and liquidity.
Which Products Are Driving the Market?
At the center of the expansion is BlackRock’s USD Institutional Digital Liquidity Fund, known as BUIDL. The fund provides exposure to short-term US Treasurys with daily yield accrual and blockchain-based settlement. Industry data shows BUIDL has gathered close to $2 billion in assets, making it the largest single product in the segment.
Several other offerings have followed. Circle’s USD Coin Yield (USYC), Superstate’s US Treasury Bill Token (USTB), and Ondo Finance’s Short-Term US Government Bond Fund (OUSG) all provide tokenized access to government debt through regulated fund structures. While they differ in design and target users, the common theme is direct exposure to Treasury bills delivered through onchain instruments.
The rapid build-out of these products shows how asset managers and fintech firms are treating blockchains less as speculative venues and more as distribution rails for traditional fixed-income products.
Why Treasury Bills Work Well Onchain
US Treasury bills are particularly suited for tokenization. They combine low credit risk with short duration, making them easy to price, roll, and integrate into collateral frameworks. When placed onchain, they gain additional features such as real-time settlement and the ability to interact with smart contracts.
For institutions, tokenized T-bills have started to function as a regulated entry point into decentralized finance. Instead of holding stablecoins or volatile tokens, firms can deploy tokenized government debt for margining, settlement, and liquidity management while staying anchored to traditional financial assets.
This use case has moved beyond theory. Large financial institutions have already tested tokenized money market funds and Treasury products as part of broader experiments with onchain collateral and settlement workflows.
Investor Takeaway
Tokenized T-bills are becoming a practical bridge between traditional finance and DeFi, offering yield, regulatory structure, and blockchain efficiency in a single instrument.
How Does This Fit Into the Broader RWA Boom?
The rise of tokenized Treasurys is unfolding alongside rapid growth in other real-world asset categories. Data from RedStone shows private credit expanding even faster, supported by yields that exceed those available in many traditional markets. Together, these segments are reshaping how capital flows into onchain environments.
Unlike early tokenization efforts that focused on experimental assets, today’s growth centers on instruments institutions already understand. Government debt, money market funds, and private credit all have established demand. Tokenization mainly changes how these assets move, settle, and integrate with other systems.
This trend has also drawn attention from major banks and asset managers, several of which are preparing tokenized money market funds and related products for clients. The interest signals that tokenization is no longer limited to crypto-native firms but is becoming part of mainstream financial infrastructure.
What Comes Next for Tokenized Treasurys?
If current momentum holds, tokenized US Treasurys are likely to remain a core building block of institutional onchain finance. Wider adoption will depend on regulatory treatment, interoperability between blockchains, and how easily these tokens plug into custody, clearing, and risk systems used by large investors.
The appeal is straightforward: Treasurys already anchor the global financial system. Moving them onchain does not change the asset itself, but it changes how quickly and flexibly it can be used. As more firms experiment with tokenized collateral and real-time settlement, government debt may become one of the most common assets circulating across blockchain networks.