TL;DR:
- Tokenized Treasuries hit $8.6B, led by BlackRock’s BUIDL and Circle’s USYC.
- DBS and major exchanges now test them as repo and margin collateral.
- Chainlink and Swift pilots enable bank-level interoperability with blockchain.
Tokenized Treasuries have quietly become one of the fastest-growing segments in digital finance, signaling a turning point where blockchain-based assets are merging with traditional banking infrastructure. The market value of tokenized U.S. Treasuries has surged to $8.63 billion, reflecting a shift from passive yield to active collateral use.
From yield to collateral: institutions test real-world utility
Major institutions are transforming tokenized Treasuries into usable collateral. BlackRock’s BUIDL fund reached about $2.85 billion, followed by Circle’s USYC and Franklin Templeton’s BENJI near $865 million each. The trend is no longer confined to crypto-native platforms; exchanges like Bybit and Crypto.com now allow tokenized money-market funds as collateral, letting users earn Treasury yields while maintaining market exposure.
Traditional banks are joining the movement. Singapore’s DBS became the first major bank to test Franklin Templeton’s sgBENJI as repo and credit collateral. The bank also plans to integrate the fund on its digital exchange alongside Ripple’s RLUSD stablecoin, converting tokenized funds from static investments into functional components of financing operations.
Infrastructure is advancing to meet institutional standards. Chainlink and Swift, together with UBS Tokenize, completed a pilot using ISO 20022 messages to process tokenized fund actions, showing that existing banking rails can now communicate directly with blockchain systems. This breakthrough paves the way for interoperability, allowing custodians to treat tokenized Treasuries like any other security.
Yet, challenges persist. Most tokenized funds remain accessible only to qualified purchasers, and redemption schedules limit their liquidity compared to 24/7 crypto markets. Moreover, exchanges still apply margin discounts of about 10%, compared to the 2% haircuts seen in traditional repo markets.
The outlook points to rapid integration. With the U.S. CFTC’s new Tokenized Collateral and Stablecoins Initiative and ongoing bank pilots, these digital Treasuries are on track to evolve from niche experiments to an operational layer in the global collateral ecosystem.
