21co analyst: Tokenized U.S. Treasuries to reach $3 billion by end of year
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21co analyst: Tokenized U.S. Treasuries to reach $3 billion by end of year
Currently, there are over 15 tokenized U.S. Treasury products on the Ethereum blockchain, managing nearly $2 billion in assets.
Navigating Web3 tides with focused insightsSource: cryptoslate
Compiled by: Blockchain Knight
Tom Wan, analyst at 21co, believes that tokenized U.S. Treasuries could reach $3 billion by the end of 2024, driven by rising adoption among DeFi projects and decentralized autonomous organizations (DAOs).
Wan argues that this trend is fueled by demand for diversification and stability, particularly as higher interest rates make these assets more attractive.
Currently, there are over 15 tokenized U.S. Treasury products across Ethereum Virtual Machine (EVM) chains, managing nearly $2 billion in assets.
"DeFi protocols are diversifying into Treasuries by incorporating tokenized U.S. Treasuries and stablecoins," said Wan. "This marks a shift in the crypto asset ecosystem toward real-world assets (RWA)."
Notable examples include Arbitrum and Maker DAO, which have allocated $27 million and $1 billion respectively into these yield-generating products.
Backed by financial giants such as BlackRock and Securitize, these investments form part of a broader strategy offering risk-free yields—provided users remain within the blockchain ecosystem.
BlackRock's Institutional Digital Liquidity Fund (BUIDL) has recently become the largest tokenized Treasury fund, surpassing Franklin Templeton's BENJI fund.
Since its launch at the beginning of the year, BUIDL's market cap has surged to nearly $500 million, reflecting growing market demand for these assets.
The market for tokenized U.S. Treasuries has experienced explosive growth, with over $2 billion worth of assets tokenized across blockchains such as Ethereum, Polygon, and Solana.
Wan says this growth is expected to continue, with the market capitalization of tokenized U.S. Treasuries potentially exceeding $3 billion by the end of 2024.
The integration of tokenized U.S. Treasuries into DeFi represents a significant development in the convergence of traditional finance and blockchain technology. As more DAOs and DeFi projects adopt these instruments, the sector is poised for substantial expansion, attracting investors seeking reliable returns amid the volatility of crypto markets.
This trend highlights the potential of real-world asset tokenization to transform the financial landscape by enabling greater liquidity, faster transaction speeds, and lower fees.
As major financial institutions increasingly explore blockchain technology, the adoption of tokenized assets is set to reshape the future of finance.
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