Tokenized US Treasuries See 50x Growth in Under 2 Years

Tokenized US Treasuries have emerged as one of the fastest-growing segments of the real-world asset (RWA) market, with data pointing to 50x growth in less than two years amid rising institutional demand for on-chain yield.

Tokenized Treasury Market Growth

The combined market capitalization of tokenized US Treasury products has exploded from well under $200 million in January 2024 to almost $7 billion in late 2025. This growth underscores the rapid acceleration of on-chain adoption for government-backed debt instruments. According to Token Terminal, the market has seen significant expansion, driven by institutional demand for on-chain yield.

BlackRock's BUIDL Fund

At the center of this expansion is BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL), which is widely regarded as the flagship product of the tokenized Treasury market. The blockchain-based fund provides investors with exposure to short-term US Treasuries while offering daily yield accrual and on-chain settlement. Industry data shows that BUIDL has amassed close to $2 billion in assets under management.

Other Prominent Offerings

Other prominent offerings include USD Coin Yield (USYC) from Circle, US Treasury Bill Token (USTB) from Superstate, and Ondo Short-Term US Government Bond Fund (OUSG) from Ondo Finance. Each product offers tokenized access to US government debt through regulated fund structures, reflecting a broader push to bring traditional fixed-income instruments onto blockchain rails.

Tokenized Treasury Bills and DeFi

US Treasury bills are particularly well-suited for tokenization, as they combine the safety of US government backing with the efficiency of blockchain-based settlement, creating a regulated gateway into decentralized finance (DeFi) markets. Institutional adoption of tokenized Treasury bills is gaining traction, particularly for use in settlement and margining. Traditional financial institutions are using tokenized government debt to improve capital efficiency while maintaining exposure to low-risk assets.

Institutional Adoption

DBS, Southeast Asia’s largest financial institution by assets, was among the first major lenders to test tokenized funds, including blockchain-based Treasury products. The bank has piloted tokenized money market funds and government securities as part of broader efforts to use on-chain assets for collateral management and settlement.

Market Evolution

Tokenized Treasury bills have grown in tandem with other on-chain assets, contributing to the rapid evolution of the tokenization market. RedStone data shows that private credit has been the fastest-growing segment, buoyed by yields that exceed those of traditional investment vehicles. As the market continues to grow, it is likely that we will see increased adoption of tokenized Treasury bills and other on-chain assets.

Future Outlook

The growth of tokenized US Treasuries is expected to continue, driven by rising institutional demand for on-chain yield and the increasing adoption of blockchain technology in traditional finance. As the market evolves, we can expect to see new products and services emerge, further expanding the use cases for tokenized Treasury bills and other on-chain assets.