Rising Adoption of Tokenized US Treasuries
Tom Wan, an analyst at 21co, predicts that tokenized US treasuries will reach $3 billion by the end of 2024. This growth stems from increasing adoption among DeFi projects and Decentralized Autonomous Organizations (DAOs).
Wan attributes this trend to a growing demand for diversification and stability, particularly as these assets become more attractive amidst high interest rates.
Growing Presence in DeFi
Currently, Ethereum Virtual Machine (EVM) chains host over 15 tokenized US Treasury products, managing approximately $2 billion in assets under management (AUM).
Wan highlights that DeFi projects are diversifying their treasuries by integrating tokenized US Treasuries and stablecoins. Examples include Arbitrum and MakerDAO, which have allocated $27 million and $1 billion, respectively, to these yield-bearing products.
Institutional Involvement and Market Growth
Financial giants like BlackRock and Securitize are driving this trend by offering risk-free yields within the blockchain ecosystem. BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL), now the largest tokenized treasury fund, has grown to nearly $500 million since its launch, surpassing Franklin Templeton’s BENJI fund.
Poised Growth in Tokenized US Treasuries
The tokenized US Treasury market has experienced rapid expansion, with assets exceeding $2 billion on blockchains such as Ethereum, Polygon, and Solana. Wan predicts continued growth, estimating that the market cap could surpass $3 billion by the end of 2024.
This integration into DeFi treasuries marks a significant development in merging traditional finance with blockchain technology. As more DAOs and DeFi projects adopt these assets, the sector is expected to expand significantly, attracting investors seeking stable returns amidst crypto market volatility.
Furthermore, this trend underscores the transformative potential of real-world asset tokenization, promising enhanced liquidity, faster transactions, and reduced fees. Major financial institutions exploring blockchain technology are poised to reshape the future of finance through the adoption of tokenized assets.
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