Tokenized U.S. Treasuries Surpass $10 Billion as Institutional Interest Grows

Tokenized U.S. Treasuries have reached a significant milestone, surpassing $10.13 billion in total value as of January 24, 2026. This growth is attributed to a 7.59% increase in the last seven days, driven by products like Circle's USYC, BlackRock's BUIDL, and Ondo's USDY. These instruments offer 24/7 trading, serve as collateral in DeFi, and are backed by U.S. government debt, making them attractive for both institutional and individual investors.

Ethereum remains the dominant blockchain for these tokenized assets, with $5.6 billion of the total value held on the network. BNB Chain and Stellar also host substantial allocations, with $2.1 billion and $698.7 million respectively. This diversification across blockchains indicates a growing acceptance and adoption of tokenized real-world assets in the digital finance ecosystem.

What is driving the growth in tokenized U.S. Treasuries?

The rise of tokenized U.S. Treasuries is being fueled by institutional and individual investor interest in modern real-world asset instruments. On-chain data from RWA.xyz shows that these assets span 64 products and have nearly 59,000 holders. Circle’s USYC leads the market with a $1.69 billion market cap and a 3.01% 7-day APY. Other notable products include BlackRock's BUIDL ($1.68 billion) and Ondo's USDY ($1.20 billion).

What are the implications of tokenized U.S. Treasuries for the market?

Tokenized U.S. Treasuries are reshaping traditional finance by making government-backed debt more accessible and liquid. These instruments allow investors to trade digital tokens representing U.S. government debt at any time, which is a departure from traditional market hours. They also serve as collateral in DeFi protocols, opening up new use cases and opportunities for liquidity providers.

Products like USDY appeal to individual investors due to their lower entry barriers, while others like BUIDL cater to institutional clients with higher minimum investment requirements. This dual approach ensures that both retail and institutional investors can benefit from the advantages of tokenized assets. As these instruments gain traction, they are likely to influence the broader adoption of tokenization in other asset classes, such as private credit and real estate.

What are the risks and limitations of tokenized U.S. Treasuries?

Despite the growth and potential of tokenized U.S. Treasuries, there are risks and limitations to consider. The market is still relatively new, and regulatory frameworks may not yet be fully developed to address the unique aspects of tokenized assets. Additionally, while these instruments offer 24/7 trading and liquidity, they are still subject to market volatility and price fluctuations.

Another limitation is the current low percentage of stablecoin transactions that involve real-world payments. Although stablecoins have moved $35 trillion on blockchain rails in 2023, only 1% of this volume represented actual payments such as remittances and B2B transactions. This highlights the need for clearer benchmarks to evaluate the true impact and adoption of tokenized assets in the real economy.