CryptoForDay

Your daily dose of crypto news

US Treasurys Tokenization Surpasses $1B on Public Blockchains

2 min read
203a61fe61b2c860b13e570c68a29836 CryptoForDay

US Treasurys Tokenization Surpasses $1B on Public Blockchains

The total value of United States Treasurys tokenized on public blockchains has exceeded $1 billion. This is due to traditional financial firms digitizing their securities on the blockchain, a trend that has continued amidst high interest rates. According to data from 21.co and Dune Analytics, there are 17 different tokenized government securities with a combined value of $1.07 billion as of March 28. The majority of these assets are based on the Ethereum, Polygon, and Stellar networks.

Leading the pack is investment firm Franklin Templeton, with over $360.1 million in assets and a 33.6% market share through its Franklin OnChain U.S. Government Money Fund (FOBXX). This tokenized fund, represented by the BENJI token, was launched in 2021 and utilizes the Polygon and Stellar blockchains. In second place is BlackRock’s USD Institutional Digital Liquidity Fund (BUILD) with $244.8 million worth of assets tokenized, representing 22.8% of government Treasurys on the blockchain.

For those unfamiliar, Treasurys are debt securities issued by the U.S. federal government. Investors purchase these securities to lend money to the government, and in return, the government promises to repay the principal amount along with interest on a specified date. With the recent increase in interest rates in the United States, government treasuries have become a more appealing investment option for investors, considering the risk-return perspective.

In an effort to control inflation, the U.S. Federal Reserve has kept its benchmark interest rates at a 23-year high, ranging between 5.25% and 5.50%. As a result, tokenized U.S. Treasury securities on the blockchain have seen a staggering 641% increase in 2023.

Tokenizing U.S. Treasurys on the blockchain involves creating digital tokens that represent ownership of the underlying security. This process revolutionizes the way securities are issued, traded, and managed, offering increased liquidity and enabling investors with limited capital to participate.

Major financial institutions like UBS and JPMorgan have ventured into asset tokenization projects, aiming to bridge the gap between traditional financial assets and blockchain technology. Even crypto projects are getting involved, utilizing tokenized U.S. Treasurys to support their operations. For instance, decentralized finance platform Ondo Finance currently holds 38% of BlackRock’s BUILD, making it the largest holder of the fund’s supply.

The digitization of U.S. Treasurys on the blockchain has surpassed $1 billion, with traditional financial firms leading the charge. This trend is driven by elevated interest rates and the numerous benefits that come with tokenization, such as increased liquidity and accessibility for investors. Major financial institutions and crypto projects alike are embracing this technology, further propelling the tokenization of government securities.

5 thoughts on “US Treasurys Tokenization Surpasses $1B on Public Blockchains

  1. I don’t understand why anyone would want to invest in tokenized U.S. Treasurys. It sounds risky to me.

  2. The rise in tokenized U.S. Treasurys on the blockchain is a clear indication of the industry’s shift towards digital assets. It’s exciting to be part of this transformative era.

  3. Tokenizing U.S. Treasurys is just a fancy way to attract uninformed investors. It’s all smoke and mirrors.

  4. The fact that decentralized finance platform Ondo Finance holds 38% of BlackRock’s BUILD is incredible! It shows the versatility and potential of tokenized government securities.

  5. The fact that major financial institutions like UBS and JPMorgan are venturing into asset tokenization projects is a positive sign for the future. 🏦 It shows that they understand the importance of embracing blockchain technology. 💡

Leave a Reply

Copyright © All rights reserved.