Insights Trends Tokenized US Treasuries Surpass $1 Billion

Tokenized US Treasuries Surpass $1 Billion

March 28, 2024 Trends
BITmarkets | Tokenized US Treasuries Surpass $1 Billion

Over $1 billion in United States Treasurys have been tokenized across various blockchains including Ethereum, Polygon, and Solana, thanks in part to the recent debut of the BlackRock USD Institutional Digital Liquidity Fund.

The "BUIDL" fund by BlackRock, initiated on Ethereum on March 20, has now achieved a market capitalization of $244.8 million.

Etherscan records show that four recent transactions totaling $95 million this week have significantly contributed to the fund's growth, positioning it as the second-largest tokenized government securities fund.

Currently, BUIDL is second only to the Franklin OnChain U.S. Government Money Fund (FOBXX) by Franklin Templeton, which has been around for 11 months and holds $360.2 million in U.S. Treasurys.

This information comes from data on a Dune Analytics dashboard compiled by 21Shares' parent company.

According to the dashboard, a total of $1.08 billion in U.S. Treasurys has been tokenized across 17 offerings.

The most significant recent contribution to the BlackRock fund was a $79.3 million deposit from Ondo Finance, a company specializing in the tokenization of real-world assets.

This move enables instant settlements for its U.S. Treasury-backed token, OUSG.

Etherscan data shows that Ondo Finance made a total contribution of $95 million in four transactions.

Ondo Finance has acquired a 38% ownership stake in BUIDL, as highlighted by Tom Wan, a research strategist at 21.co, in a post on March 27.

The value of BUIDL is directly tied to the United States dollar on a 1:1 basis, and it distributes daily accrued dividends to investors monthly.

The fund was introduced on Ethereum using the Securitize protocol.

21.co, through its Dune dashboard, has highlighted the attractiveness of tokenized government treasuries from both risk and return perspectives, especially in the current climate of high interest rates, compared to stablecoin yields.

BlackRock's CEO Larry Fink has recently stated that the efficiency of capital markets could be significantly improved through blockchain tokenization, a sector Boston Consulting Group predicts will grow to a $16 trillion market by 2030.

U.S. Treasurys represent just one aspect of the broader potential for asset tokenization, which includes stocks, real estate, and more.

Ethereum is notable for comprising $700 million of the total real-world assets (RWA) tokenized on-chain.

The FOBXX fund by Franklin Templeton is tokenized using Stellar and Polygon, holding the second and third largest shares of the tokenized product market, with $358 million and $13 million, respectively.

Other significant players in the tokenization of RWAs include WisdomTree, along with blockchain-native firms such as Ondo Finance, Backed Finance, Matrixdock, Maple Finance, and Swarm.

Sources:

https://cointelegraph.com/news/us-treasurys-tokenized-on-chain-hit-1-billion

https://etherscan.io/token/0x7712c34205737192402172409a8f7ccef8aa2aec

https://dune.com/21co/tokenization-government-securities

https://x.com/OndoFinance/status/1773099943546270092

https://etherscan.io/token/0x7712c34205737192402172409a8f7ccef8aa2aec

https://x.com/tomwanhh/status/1773098496926667226

https://www.youtube.com/watch?v=HTveRlW7QPo

https://dune.com/21co/tokenization-government-securities

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