Tokenized US Treasuries Break the $2 Billion Market Cap Barrier

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Tokenized US Treasuries crossed the $2 billion market cap mark on August 26, according to RWA.xyz DATA. The platform tracks the size of US Treasuries, bonds and cash equivalents.

This sector has registered a growth of 164% in 2024, after starting the year sized at 769 million dollars. Much of this momentum can be attributed to BlackRock’s efforts in the tokenization industry, as they launched the BUIDL fund on March 20.

BUIDL allocates its assets in cash, US Treasury bills and repurchase agreements, with its shares priced at $1. The fund was implemented on Ethereum and is the largest by market capitalization, approaching $510 million.

As a result of the implementation of BUIDL on Ethereum, the network became the largest infrastructure in the tokenized US treasury market, with a size of 1.46 billion USD.

This spot previously belonged to Stellar, as most FOBXX shares in Franklin Templeton’s tokenized fund were issued using its blockchain. FOBXX is the second largest tokenized fund in the US with a market capitalization of USD 428 million.

Notably, Ondo’s US dollar yield is the highest by number of holders as 4,240 investors interact with its USDY token. In addition, the size of USDY recently exceeded $347 million, giving it the position as the third largest tokenized fund.

Bridges to DeFi

Aave Laboratories proposed an update to the GHO Stability Module (GSM) on August 26 to include the use of BUIDL shares in its ecosystem.

GSM is a feature implemented in the GHO stablecoin this year that provides seamless exchanges between the Aave token and stablecoins USD Coin (USDC) and Tether USD (USDT).

Thus, the new GSM would add the ability in the smart contract to exchange users’ USDC for BUIDL shares, giving exposure to the fund’s daily returns and diversifying GHO’s underlying assets.

The proposal is still in the “temperature check” phase, where members of the governance give their input on the content of the text.

Furthermore, the use of real-world assets (RWA) such as tokenized US Treasuries in decentralized protocols is also being explored by MakerDAO, which has become Sky today.

As part of Endgame, Sky aims to add RWA to its basket of assets to help maintain the stability of its Sky Dollar (USDS) stablecoin.

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