Over $1 billion worth of United States Treasurys now exist on various blockchains, including Ethereum, Polygon, and Solana. This increase in tokenized government securities is partially due to the recent launch of the BlackRock USD Institutional Digital Liquidity Fund.
BlackRock’s product, known as “BUIDL,” was released on Ethereum on March 20 and currently has a market cap of $244.8 million. According to Etherscan, four transactions totaling $95 million were made to the fund in the past week, giving it a boost and making it the second largest tokenized government securities fund. The largest fund is Franklin Templeton’s Franklin OnChain U.S. Government Money Fund (FOBXX), which has $360.2 million in U.S. Treasurys.
Data from 21Shares’ parent company on a Dune Analytics dashboard shows that a total of $1.08 billion in U.S. Treasurys have been tokenized across 17 different products.
The most recent deposit of $79.3 million to BlackRock’s fund was made by Ondo Finance, a real-world asset tokenization firm. This deposit will allow instant settlements for Ondo Finance’s own U.S. Treasury-backed token, OUSG. Overall, Ondo Finance has made $95 million in deposits across four transactions. As a result, Ondo Finance now holds a 38% share in BUIDL, as noted by Tom Wan, a research strategist at 21.co.
BUIDL’s price is pegged 1:1 with the United States dollar and pays daily accrued dividends directly to investors each month. It was launched on Ethereum using the Securitize protocol.
According to 21.co’s Dune dashboard, tokenized government treasurys are seen as more attractive in terms of risk and return compared to stablecoin yields, especially considering the current high-interest rate environment.
BlackRock CEO Larry Fink has expressed that blockchain tokenization could make capital markets more efficient. Boston Consulting Group estimates that the blockchain tokenization market could reach $16 trillion by 2030.
While U.S. Treasurys are a significant part of the tokenized assets, other assets such as stocks and real estate can also be tokenized. Ethereum currently accounts for $700 million of all real-world assets tokenized on-chain.
Franklin Templeton’s FOBXX is tokenized on the Stellar and Polygon blockchains, which have the second and third largest market share of tokenized products, with $358 million and $13 million respectively.
Other major asset management firms, such as WisdomTree, are also involved in tokenizing real-world assets. Additionally, there are blockchain-native firms like Ondo Finance, Backed Finance, Matrixdock, Maple Finance, and Swarm operating in this space.
Overall, the tokenization of assets is becoming increasingly prevalent, with a growing number of firms and investors recognizing its potential benefits.