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In a significant development, the market for tokenized U.S. Treasury debt has seen a surge, with the value of Treasury notes tokenized on public blockchains reportedly surpassing $1 billion for the first time.
What Happened: The market value of U.S. Treasury notes tokenized on public blockchains such as Ethereum, Polygon, Valanche, Stellar, and others has crossed the $1 billion threshold, CoinDesk reported on Wednesday. This information was tracked by Tom Wan, an analyst at crypto firm 21.co.
Tokenized Treasuries, digital versions of U.S. government bonds that can be traded as tokens on the blockchain, have seen a nearly 10-fold increase since January of the previous year and an 18% rise since BlackRock announced its Ethereum-based tokenized fund BUIDL on Mar. 20.
As per the report, BUIDL is the second-largest such fund, with a tokenized value of $245 million. It is only surpassed by Franklin Templetons Franklin OnChain U.S. Government Money Fund (FOBXX), which leads with $360.2 million in deposits.
The recent surge in Treasury yields over the past two years has increased demand for their tokenized versions. Investing in tokenized Treasuries allows crypto investors to diversify their portfolios and settle transactions at any time.
The beauty of tokenization, [is] you can settle the transaction 24/7, said Wan.
See Also: Crypto Traders Secrets: How $100K In Dogecoin And Dogwifhat Could Mint $1M
Why It Matters: Tokenization, the process of converting tangible and intangible assets into digital tokens, has been gaining traction among Wall Street firms. This includes everything from shares, and bonds to gold bullion, real estate as well as digital and physical art. Earlier this year, State Street Global Advisors expressed interest in tokenizing exchange-traded funds (ETFs).
In a related development, DigiFT, the first licensed exchange for on-chain real-world assets, announced the launch of the first ever U.S. Treasury Bill depository receipt tokens. These tokens represent direct beneficial ownership in the underlying U.S. Treasury Bill, providing a new avenue for investors to safeguard their rights and protection on-chain.
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