Tokenized US Treasurys have surfaced as one of the most rapidly expanding sectors within the real-world asset (RWA) market, witnessing a staggering 50x growth in less than two years as institutional demand for on-chain yield rises.
According to data from Token Terminal, the overall market capitalization of tokenized US Treasury products skyrocketed from under $200 million in January 2024 to nearly $7 billion by late 2025. This growth highlights the swift acceleration of on-chain adoption for government-backed debt instruments.
At the forefront of this growth is BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL), recognized as the flagship offering in the tokenized Treasury market.
This blockchain-based fund affords investors exposure to short-term US Treasurys, featuring daily yield accrual and on-chain settlement. Industry data indicates that BUIDL has amassed nearly $2 billion in assets under management.
Other significant 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 provides tokenized access to US government debt via regulated fund structures, reflecting a wider initiative to transition traditional fixed-income instruments onto blockchain technologies.
Related: Goldman Sachs, BNY to offer tokenized money market funds for clients
Tokenized Treasury bills emerge as a key gateway to institutional DeFi
US Treasury bills lend themselves particularly well to tokenization, merging the safety of US government backing with the efficiency of blockchain-based settlement, thereby creating a regulated entry point into decentralized finance (DeFi) markets.
As noted by Cointelegraph, institutional adoption of tokenized Treasury bills is gaining momentum, especially for settlement and margining purposes. Traditional financial entities are utilizing tokenized government debt to enhance capital efficiency while retaining exposure to low-risk assets.
DBS, the largest financial institution in Southeast Asia by assets, was among the first major banks to explore tokenized funds, including blockchain-based Treasury products. The bank has piloted tokenized money market funds and government securities as part of broader efforts to leverage on-chain assets for collateral management and settlement.
Tokenized Treasury bills have experienced growth alongside other on-chain assets, driving the rapid development of the tokenization market. RedStone data indicates that private credit has emerged as the fastest-growing segment, supported by yields surpassing those of conventional investment options.
Related: New protocol targets redemption delays in $20B tokenized market
