Tokenized Treasuries
Web3 / tokenization
On-chain digital tokens that represent ownership of US Treasury bills, notes, bonds, or Treasury-focused money market funds, issued by regulated financial institutions and held via blockchain infrastructure. A licensed issuer purchases US government debt, places it with a qualified custodian, and mints tokens on a public or permissioned blockchain representing proportional shares. Holders receive yield automatically through smart contracts, typically via daily net asset value appreciation or token rebasing, at rates tracking short-term Treasury yields. Tokenized Treasuries are classified as securities under existing US law and require KYC/AML compliance from investors. They sit at the intersection of traditional finance and DeFi, allowing protocols, DAOs, and institutional treasuries to hold sovereign-grade, dollar-denominated yield without leaving the blockchain ecosystem. The market grew from under $200 million at the start of 2024 to approximately $10 billion by late 2025, driven by a favorable interest rate environment and institutional demand for on-chain yield. Example: BlackRock launched its BUIDL (USD Institutional Digital Liquidity Fund) on Ethereum in March 2024 via tokenization platform Securitize, with Bank of New York Mellon handling custody. By late 2025, BUIDL had grown to nearly $2 billion in assets under management and was accepted as margin collateral on centralized exchanges, becoming the benchmark for institutional on-chain Treasury products. Why it matters for DeFi: Tokenized Treasuries have become the anchor instrument of the real-world asset market, giving DeFi protocols and DAOs a productive alternative to idle stablecoin holdings. They represent the clearest current example of traditional financial assets achieving real utility on public blockchains, unlocking 24/7 global access, programmable collateral use, and transparent on-chain auditability for instruments previously locked inside legacy financial plumbing.
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