The market value of these notes has increased nearly tenfold since January of last year and eighteen percent since traditional finance giant BlackRock announced the launch of the Ethereum-based tokenized fund BUIDL on March 20.
TakeAway Points:
- Treasury notes tokenized have crossed over $1 billion for the first time.
- The demand for their tokenized counterparts has increased due to the sharp increase in Treasury yields over the last two years.
- Tokenized Treasury investments enable cryptocurrency investors to settle transactions on any given day and help diversify their portfolios.
Treasury notes tokenized Surges
Treasury notes tokenized through public blockchains like Ethereum, Polygon, Valanche, Stellar, and others have crossed over $1 billion for the first time, according to data tracked by Tom Wan, an analyst at crypto firm 21.co.
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Tokenized Treasury notes are digital representations of U.S. government bonds that can be traded as tokens on the blockchain. The market for tokenized U.S. Treasury debt is booming.
BUILD is the second-largest fund of its type, trailing only Franklin Templeton’s Franklin OnChain U.S. Government Money Fund (FOBXX), which leads the field with deposits of $360.2 million, one share of which is represented by the BENJI token. As of this writing, BUILD has a tokenized value of $245 million.
“Just happened, $1B Total Tokenized U.S. Treasuries on Public Blockchains. Blackrock’s BUIDL increased by 400% from 40M to 240M supply in a week. OndoFinance is now the largest holder of BUIDL, holding 38% of the total supply. Now Ondo’s OUSG is fully backed by BUIDL.”
Wan posted on X.
The demand for their tokenized counterparts has increased due to the sharp increase in Treasury yields over the last two years. Since March 2022, the 10-year yield—also known as the “risk-free rate”—has increased from 1.69% to 4.22%, which has diminished the allure of lending and borrowing dollar-pegged stablecoins in the decentralised finance market.Tokenized Treasury investments enable cryptocurrency investors to settle transactions on any given day and help diversify their portfolios.
“The beauty of tokenization, is that you can settle the transaction 24/7,”
Wan added.
About
Tokenization is the process of turning material and immaterial assets into digital tokens. It has gained popularity among Wall Street corporations. This covers all assets, including stocks, bonds, real estate, gold bullion, and both tangible and digital art. State Street Global Advisors stated earlier this year that they were interested in tokenizing exchange-traded funds (ETFs).
In a parallel move, the first authorised exchange for real-world assets on-chain, DigiFT, announced the introduction of the first-ever U.S. Treasury Bill depository receipt tokens. By representing direct beneficial ownership in the underlying U.S. Treasury Bill, these tokens give investors a unique way to defend their rights and gain security on-chain.
