What Are Tokenized Treasuries?

The Basics

Tokenized treasuries are blockchain-based tokens that represent ownership of US Treasury bills, notes, or money market funds holding government securities. Instead of owning treasuries through a traditional brokerage, you hold a digital token that gives you the same economic exposure.

Think of it like this: A $100 T-bill becomes a token you can hold in your crypto wallet, transfer to anyone in seconds, and trade 24/7.

Why Does This Matter?

Traditional treasury ownership has friction:

• Settlement takes days (T+1 or T+2)
• Markets close on weekends and holidays
• Minimum investments can be high
• Transferring ownership requires paperwork and intermediaries

Tokenized treasuries solve these problems:

• Instant settlement on blockchain
• 24/7 trading and transferability
• Fractional ownership (own $10 worth of treasuries)
• Programmable integration with DeFi protocols

How Do They Work?

The typical structure involves:

1. Issuer creates a fund or SPV that holds actual treasuries

2. Tokens are minted to represent shares of that fund

3. Yield from the underlying treasuries flows to token holders

4. Redemption allows converting tokens back to dollars

Most products use a "fully backed" model where each token is backed 1:1 by real treasury holdings in a regulated custodian.

Who Are The Major Players?

BlackRock BUIDL

The largest tokenized treasury product, launched in March 2024. By late 2025 it has expanded to several chains and surpassed $2B in AUM. BlackRock partnered with Securitize to offer institutional investors exposure to T-bills on public blockchains.

• AUM: $2B+
• Minimum: $5M
• Accredited investors only

Ondo USDY

A tokenized note backed by treasuries and bank deposits. Available to non-US persons without accreditation requirements and now deployed on multiple L1s and L2s.

• AUM: $600M+
• Minimum: ~$500
• Widely available (non-US)

Franklin Templeton BENJI

The first SEC-registered fund to use public blockchain for recordkeeping. Available to retail investors through the Benji app.

• AUM: $500M+
• Minimum: $20
• US retail accessible

The Yield Question

Current yields on tokenized treasuries range from 4.5% to 5.2% APY, roughly matching the underlying Treasury rate. This is attractive compared to:

• Traditional savings accounts (often < 1%)
• Many stablecoins (0% native yield)
• Bank deposits (variable, often lower)

The key insight: tokenized treasuries bring T-bill yields on-chain for the first time at scale.

Risks To Understand

Smart Contract Risk

The token itself is code. Bugs or exploits could affect your holdings.

Counterparty Risk

You're trusting the issuer to actually hold the treasuries and honor redemptions.

Regulatory Risk

The regulatory framework for tokenized securities is still evolving.

Liquidity Risk

Not all products have active secondary markets. Redemption may take time.

Who Is This For?

Tokenized treasuries make sense for:

• DeFi protocols seeking safe yield for treasury
• Stablecoin holders who want yield without volatility
• Institutions wanting on-chain treasury exposure
• Non-US investors seeking USD yield access

The Bottom Line

Tokenized treasuries represent one of the clearest use cases for blockchain in traditional finance. They take the safest asset in the world (US government debt) and make it programmable, transferable, and accessible 24/7.

This is still early. Total tokenized treasury AUM is under $2B while the US Treasury market is $25+ trillion. But major institutions are now building here, and that's the signal that matters.