Tokenised treasuries cross from pilot to product
Asset managers have moved past proof-of-concept. The on-chain US Treasury market is now competing for the same dollars as money-market funds.
The narrative arc of "real-world assets" on public blockchains has been a familiar one. A long stretch of conference talks. A handful of cautious pilots from incumbents. A growing fringe of crypto-native protocols building infrastructure most institutional buyers were not ready to use. That phase is largely over for the cleanest asset class in the category: short-duration US Treasuries.
The BlackRock-managed BUIDL fund on Ethereum, Franklin Templeton's BENJI, and a growing list of bank-issued and asset-manager-issued equivalents have moved tokenised treasuries from a few hundred million dollars in total value two years ago to a market measured in the high single-digit billions. The growth is not driven by retail speculation — it is driven by treasurers, market makers, and exchanges that need a yield-bearing dollar instrument that settles on the same rails as the rest of their on-chain activity.
The use case is mundane, which is the point
The attraction is unexciting in exactly the way institutional finance prefers. A treasurer holds tokenised treasuries instead of holding stablecoins, and earns the prevailing T-bill rate while keeping the operational benefits of an on-chain instrument: programmable settlement, twenty-four-hour transferability, and the ability to use the position as collateral in a regulated lending venue without leaving the ledger. None of those benefits is novel in finance. The novelty is having them all in a single instrument.
The regulatory framing is also clearer than it was. The US tokenisation guidance issued under the most recent rounds of SEC and OCC clarifications, combined with the EU's MiCA framework and the established Singaporean and Hong Kong regimes, gives an issuer enough legal scaffolding to launch a tokenised cash-equivalent product without inventing the disclosure architecture from scratch. That is a non-trivial change from three years ago, when most large issuers concluded the legal effort outweighed the addressable market.
The market structure that is emerging looks more like the money-market-fund landscape than like crypto. A handful of trusted issuers will dominate the institutional segment because their reserve composition, audit cadence, and redemption mechanics meet treasury-policy criteria. A long tail of smaller and more experimental products will exist for niche use cases — non-USD denominations, tokenised corporate paper, on-chain structured notes — but the centre of gravity will be the boring instruments that fit cleanly into existing treasury workflows.
The systemic implications are still early. If tokenised treasuries continue to grow at the current pace, the on-chain dollar market begins to function as a parallel, programmable money market. That is useful, and probably resilient — short-dated US Treasuries are the cleanest collateral on earth — but it also means that liquidity stress in the tokenised market would propagate into the broader cash-equivalent ecosystem in ways that legacy regulators have only begun to model.
The direction of travel is no longer in doubt. The question for the next two years is which incumbents recognise this as the entry point to on-chain finance and which treat it as a niche.
