Tokenised treasuries reach $4.2B amid crypto market shift

The market capitalisation of tokenised U.S. Treasury products has surged to a record $4.2 billion, driven by a broad-market crypto correction that prompted investors to seek safer, yield-bearing assets.

Since late January, the sector added $800 million in value, reflecting a growing "flight to quality," according to a Binance Research report.

Ondo Finance’s short-term bond-backed tokens, OUSG and USDY, saw a combined 53% increase in market value, nearing $1 billion.

BlackRock’s BUIDL token rose 25% to surpass $800 million, while Franklin Templeton’s BENJI token grew 16% to $687 million.

Superstate’s USTB experienced the largest percentage gain, climbing over 63% to $363 million.

Conversely, Hashnote's USYC token declined by more than 20%, dropping its market cap to $900 million due to setbacks with its associated stablecoin protocol.

Brian Choe, head of research at rwa.xyz, explained the trend by likening it to traditional investors shifting from equities to U.S. Treasuries during economic uncertainty.

"This signals some investors aren't exiting the ecosystem but rather rotating capital into safer, yield-bearing assets until market conditions improve," Choe said.

Tokenised treasuries have outpaced stablecoins in growth during the recent bearish period for cryptocurrencies.

While stablecoins gained prominence during bullish phases, tokenised treasuries have become more attractive amid market corrections due to their risk-free yields and alignment with traditional financial instruments.

The rise of tokenised U.S. Treasuries highlights their potential as a bridge between blockchain technology and traditional finance.

These assets offer liquidity, faster transactions, and lower fees while maintaining stability within the volatile crypto ecosystem.

As major players like BlackRock and Franklin Templeton continue expanding their offerings, analysts predict further growth in the tokenised treasury market.

With the broader U.S. Treasury securities market valued at $27 trillion, the opportunity for further adoption remains substantial.