According to digital asset data tracker CoinGecko, tokenized Treasurys in the United States experienced a remarkable growth spurt of 641% in 2023, with traditional finance companies embracing the trend. CoinGecko’s 2024 report titled “Rise of Real World Assets in Crypto” highlights the progress made in tokenizing real-world assets (RWA). In 2023, tokenized Treasurys increased from $114 million in January to $845 million by the end of the year, indicating a significant growth of 641% within a year for blockchain-based digital tokens representing U.S. Treasury securities.
Tokenized securities are digital tokens that are backed by RWAs such as stocks and bonds. For instance, the Ondo Short-Term US Government Bond Fund utilizes the OUSG token to represent ownership of a share of the fund and its yield.
CoinGecko’s report emphasizes that Franklin Templeton, an asset management firm, is currently the largest issuer of tokenized Treasurys. The company has issued tokens worth $332 million through its On-Chain U.S. Government Money Fund, accounting for 38.6% of the market. Franklin Templeton is among the 10 exchange-traded fund (ETF) issuers that launched a spot Bitcoin ETF in the U.S. in January. Additionally, the company has applied to the U.S. Securities and Exchange Commission to launch an Ethereum ETF.
Besides Franklin Templeton, other protocols featuring yield-bearing stablecoins backed by U.S. Treasury bills are also gaining popularity. CoinGecko highlights Mountain Protocol’s USDM tokens, which have increased from $26,000 to $154 million since their launch in September 2023.
Tokenized U.S. Treasurys are predominantly based on the Ethereum network, with 57.5% of the tokens on Ethereum. However, companies like Franklin Templeton and WisdomTree Prime have issued tokenized securities on Stellar, giving the network a 39% market share.
While tokenized treasuries experienced explosive growth in 2023, their growth slowed down in 2024, with only a 1.9% increase in January. As of February 1, tokenized treasuries have a market capitalization of $861 million.
CoinGecko also highlights that commodity-backed tokens have reached a market capitalization of $1.1 billion as of February 1. Tether Gold (XAUT) and PAX Gold (PAXG) dominate the market with an 83% market capitalization for tokenized precious metals.
Furthermore, a new project has emerged that tokenizes uranium, allowing for the redemption of the precious metal through digital tokens.