Tokenized Treasuries Hit $8.6B as Repo Use Grows

The market for tokenized U.S. Treasuries has reached a significant milestone, climbing to $8.63 billion in total capitalization as of late October. This represents substantial growth from the $7.4 billion recorded in mid-September, indicating accelerating adoption among institutional players. Tokenized Treasuries now constitute the second-largest class of real-world assets (RWA) in the digital asset space, trailing only stablecoins in market significance.

Leading this expansion is BlackRock’s BUIDL token, which has grown to approximately $2.85 billion in assets under management. Following closely are Circle’s USYC at $866 million and Franklin Templeton’s BENJI at $865 million. Fidelity’s newly launched tokenized money-market fund has also demonstrated impressive traction, rising to $232 million despite its recent entry into the market. This concentration of assets among established traditional finance giants underscores the institutional credibility and regulatory compliance driving the sector’s growth.

The fundamental shift occurring in tokenized Treasury markets represents a maturation beyond simple yield generation. Tokenized money-market funds, which pool cash into short-term U.S. government securities, are increasingly being utilized as collateral for trading, credit, and repo transactions. This evolution marks a critical development in how digital representations of Treasury bills are integrated into financial markets.

The practical implementation of this collateral transformation began in June when BUIDL received approval for use on Crypto.com and Deribit exchanges. This initial breakthrough demonstrated that tokenized Treasury funds could function effectively within the same settlement and margin systems that support traditional collateral markets. By late September, the concept expanded further when Bybit announced it would accept QCDT, a DFSA-approved tokenized money-market fund backed by U.S. Treasuries, as collateral for professional clients.

This collateral functionality allows market participants to post tokenized Treasury funds in place of cash or stablecoins while continuing to earn the underlying yield from the Treasury fund. The dual benefit of maintaining trading exposure while generating Treasury returns represents a significant efficiency improvement over traditional collateral arrangements, where posted assets typically sit idle.

The growing acceptance of tokenized Treasuries across major cryptocurrency exchanges signals a broader convergence between traditional finance and digital asset markets. Platforms including Crypto.com, Deribit, and Bybit are now integrating these instruments into their core trading infrastructure, providing professional clients with enhanced capital efficiency and yield opportunities.

This integration represents more than just technological innovation—it signifies a fundamental shift in how financial institutions view and utilize digital assets. Banks and traders are increasingly recognizing tokenized Treasuries as viable alternatives to traditional repo market financing instruments. The ability to use these digital assets across multiple platforms while maintaining exposure to U.S. government securities creates new possibilities for cross-market arbitrage and risk management strategies.

The rapid growth from $7.4 billion to $8.63 billion in just over a month suggests that this trend is gaining momentum. As more institutional players enter the space and additional use cases emerge, tokenized Treasuries are positioned to become a permanent fixture in the evolving landscape of digital finance, offering the safety of government securities with the efficiency of blockchain technology.