Tokenized US Treasury Bonds Surpass $2 Billion Market Cap Barrier

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Tokenized US Treasury bonds surpassed the $2 billion market capitalization threshold on Aug. 26, according to RWA.xyz. dataThe platform tracks the size of U.S. Treasury bonds, debentures and cash equivalents.

This sector saw 164% growth in 2024, after starting the year with a volume of $769 million. Most of this momentum can be linked to BlackRock’s efforts in the tokenization industry, as they launched the BUIDL fund on March 20.

BUIDL allocates its assets to cash, U.S. Treasury bills, and repurchase agreements, and its shares are priced at $1. The fund was implemented on Ethereum and is the largest by market cap, approaching $510 million.

As a result of BUIDL's implementation on Ethereum, the network became the largest infrastructure in the tokenized US Treasury bond market, with a size of $1.46 billion.

Previously, this space belonged to Stellar, as the majority of shares in Franklin Templeton’s tokenized fund FOBXX were issued using its blockchain. FOBXX is the second-largest tokenized fund in the US, with a market cap of $428 million.

It is worth noting that Ondo’s USD yield is the largest in terms of the number of holders, with 4,240 investors interacting with its USDY token. Moreover, the USDY size recently surpassed $347 million, giving it the place as the third-largest tokenized fund.

Bridges to DeFi

Aave Laboratories proposed an update to the GHO Stability Module (GSM) on August 26 to include the use of BUIDL actions in its ecosystem.

GSM is a feature implemented in the GHO stablecoin this year, which ensures seamless exchanges between the Aave token and the stablecoins USD Coin (USDC) and Tether USD (USDT).

In this way, the new GSM would add to the smart contract the possibility of exchanging users' USDC for BUIDL shares, granting exposure to the fund's daily profitability and diversifying GHO's underlying assets.

The proposal is still in the “temperature check” phase, where members of the government provide their opinions on the content of the text.

Additionally, MakerDAO, which today rebranded to Sky, is also exploring the use of real-world assets (RWA), such as tokenized US Treasury bonds, in decentralized protocols.

As part of its endgame, Sky aims to add RWA to its basket of assets to help maintain the stability of its Sky Dollar (USDS) stablecoin.

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