Tokenized Treasuries are blockchain-based tokens whose value is backed by US Treasury securities — bills, notes, bonds, or money market funds investing exclusively in Treasuries. Each token represents either a direct claim on an underlying Treasury or a share in a fund that holds Treasuries, with yield accruing to holders on-chain rather than through traditional custodial mechanisms. As of early 2026, the category exceeds $9.2B in assets under management across more than 15 distinct products, making it the fastest-growing segment in tokenized real-world assets.
How They Work
Most tokenized Treasury products use one of two legal structures. The first is a registered 1940 Act fund model, where the token represents a beneficial interest in a money market or short-duration bond fund. Franklin Templeton’s FOBXX pioneered this approach in 2021, issuing fund shares recorded directly on the Stellar and Polygon blockchains — a first for a registered US investment fund. The second is a Regulation D private placement structure targeting accredited investors and institutions. BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL) uses this model, with fund interests issued as ERC-20 tokens on Ethereum and administered by Securitize.
Key Products
BlackRock BUIDL ($2.5B+): The dominant product in the category. Launched March 2024 on Ethereum, restricted to qualified purchasers with a $5 million minimum. Invests in US Treasuries, cash, and repo. Yield is distributed daily via on-chain token rebasing. Accepted as collateral on Aave, Frax, and other DeFi protocols — a significant milestone for institutional DeFi integration.
Franklin Templeton FOBXX ($700M+): The original tokenized Treasury fund, launched 2021. SEC-registered under the 1940 Act. Blockchain records serve as the official transfer agent record. $1 minimum investment, accessible via Benji app. Available on Stellar and Polygon.
Ondo Finance OUSG ($500M+): Tokenized exposure to a BlackRock Treasury ETF, restructured into an on-chain product. Offers both instant and standard redemption. Widely used as DeFi collateral via Flux Finance.
Superstate ($300M+): Founded by Compound Finance creator Robert Leshner. Tokenized Treasury fund targeting crypto-native institutions seeking yield on idle capital.
OpenEden ($200M+): Tokenized Treasury bills directly accessible to accredited investors, with 24/7 subscription and redemption.
Maple Cash and WisdomTree Government Money Market Digital Fund round out the major products, with WisdomTree notable for being available through a consumer-facing app.
Yield and Return Mechanics
Yield on tokenized Treasuries tracks the underlying Treasury rate — typically 90-day T-bill yields, which ranged from 5.1% to 5.3% through most of 2025. Distribution mechanisms vary: some products rebase token supply daily (more tokens in wallet), others distribute separate yield tokens, and others accrue NAV per token. The choice of mechanism has tax implications — rebasing models may trigger daily taxable events, while NAV-accrual models delay taxation until redemption.
Regulatory Framework
Products operating under the 1940 Act (FOBXX, WisdomTree) benefit from established regulatory clarity but face restrictions on marketing, leverage, and eligible investors. Reg D products (BUIDL, Superstate, OpenEden) are restricted to accredited investors and qualified purchasers but have more structural flexibility. No tokenized Treasury product has yet obtained SEC registration as a digital native security — all work within existing regulatory frameworks.
DeFi Integration
The defining feature distinguishing tokenized Treasuries from traditional money market funds is DeFi composability. BUIDL is accepted as collateral on Aave v3 and as margin on the Ethena synthetic dollar protocol, allowing institutions to earn Treasury yield while simultaneously using the position as productive collateral. This “yield-bearing collateral” function has no equivalent in traditional finance and represents the clearest example of tokenization creating new functionality rather than simply digitizing old structures.
2026 Outlook
The tokenized Treasury market is expected to exceed $20B by year-end 2026 as additional asset managers launch products, stablecoin issuers explore Treasury-backed alternatives, and DeFi protocols deepen integration. The category’s growth is structurally driven by three factors: institutions seeking on-chain yield for idle crypto capital, the DeFi demand for productive collateral, and the demonstration effect of BUIDL showing that the largest asset manager in the world considers blockchain a viable distribution channel.