Tokenized Treasuries Hit $9B as DeFi Embraces Traditional Finance

For two years, the foundational premise of decentralized finance (DeFi) was that a parallel financial system could be built exclusively on crypto-native assets. Ethereum staked through protocols like Lido anchored billions in loans, wrapped Bitcoin backed derivatives, and algorithmic stablecoins attempted to create synthetic dollars from protocol emissions. This entire edifice operated under the assumption that crypto could bootstrap its own collateral hierarchy without touching the $27 trillion US Treasury market. That assumption has fundamentally broken over the past 18 months, marking a pivotal shift in the industry’s trajectory.

The data reveals the scale of this transformation. Tokenized US Treasuries and money-market funds now sit at approximately $9 billion across more than 60 distinct products and over 57,000 holder addresses, according to the source text. The average seven-day yield for these assets is near 3.8%. This growth in the period was more than fivefold, indicating explosive adoption. Zooming out to the entire real-world asset (RWA) stack, tokenized RWAs on public chains approach $19 billion, with government securities and income products dominating the landscape.

This is not a niche experiment. US Treasuries have become the spine of this new tokenized stack, functionally replicating their critical role in the traditional $5 trillion US repo market—the foundational instrument against which nearly everything else clears in conventional finance. The integration signifies that DeFi is no longer operating in isolation but is building bridges to the bedrock of the global financial system.

The migration of traditional finance giants into the tokenization space is the primary driver of this growth. Their participation validates the model and provides the scale and regulatory clarity needed for broader adoption. BlackRock’s BUIDL fund, a tokenized US Treasury fund, has reached nearly $3 billion in size. Its acceptance as collateral on major crypto exchange Binance and its extension to the BNB Chain demonstrates its utility within the crypto-native ecosystem, blurring the lines between traditional and decentralized finance.

Franklin Templeton’s BENJI token represents another significant milestone, embodying over $800 million in a US-registered government money-market fund. Notably, its shareholder records are maintained on seven different blockchain networks, showcasing a sophisticated, multi-chain operational model. Meanwhile, Circle’s USYC token quietly surpassed $1.3 billion in July. Its growth was fueled by a partnership with Binance that enabled institutional investors to use the token as collateral for derivatives trading, directly injecting traditional asset liquidity into crypto market mechanics.

The convergence is further underscored by the actions of traditional banking titans. JPMorgan launched a $100 million tokenized money-market fund on the Ethereum blockchain, a move that allows qualified investors to access these instruments through a new technological layer. The involvement of entities like BlackRock, Franklin Templeton, Circle, and JPMorgan signals a strategic, large-scale institutional commitment to defining the future of asset tokenization.

The rise of tokenized treasuries represents a fundamental recalibration for DeFi. The original vision of a purely crypto-native financial system is being supplanted by a hybrid model where the stability and yield of traditional assets like US Treasuries provide a reliable collateral base. This integration addresses key criticisms of DeFi, such as volatility and the reflexive nature of crypto-native collateral, by anchoring protocols in the deep liquidity and perceived safety of US government debt.

For crypto markets, the implications are profound. Assets like ETH, BTC, and BNB now exist alongside tokenized versions of US Treasuries and money-market funds in collateral pools. Stablecoins like USDC and USDT, which are already backed by traditional assets, are seeing their model validated and extended by the tokenization of the underlying securities themselves. This creates a more robust and interconnected financial layer where capital can flow more freely between traditional yield and crypto-native opportunities.

The $9 billion figure for tokenized Treasuries, while significant, is just the beginning when viewed against the $27 trillion traditional market. The more than fivefold growth in 18 months suggests this trend has substantial momentum. As major institutions continue to build and deploy products like BUIDL, BENJI, and USYC, the spine of traditional finance is being digitally replicated on-chain. This convergence is no longer a theoretical possibility but an established, accelerating reality that is reshaping the foundation of both decentralized and traditional finance.