Tokenized funds rise to $11.39 for every $100 in stablecoins, nearly quadrupling in two years
RWA Signal Insight
U.S. TreasuriesThe ratio of tokenized fund value relative to stablecoins has surged from $2.99 to $11.39 per $100 over the past two years, reflecting a significant shift in on-chain capital allocation. While the $300 billion stablecoin market remains dominated by USDT and USDC, investors are increasingly seeking yield through tokenized Treasury and money market products. Major issuers like Circle, BlackRock, and Ondo have captured billions in assets, with total tokenized fund value estimated between $15 billion and $33 billion. This growth is driven by the desire to earn returns on idle capital, a feature traditional stablecoins lack. Regulatory developments, specifically the anticipated GENIUS Act, may further accelerate this trend by restricting yield on payment stablecoins while favoring tokenized funds as reserves. Despite this momentum, liquidity remains constrained by KYC requirements and redemption windows, limiting the immediate interoperability of these assets. Institutional interest from firms like JPMorgan and BlackRock underscores a long-term strategy to standardize on-chain settlement for traditional financial products.
Key points
- Tokenized fund-to-stablecoin ratio increased nearly fourfold to $11.39 per $100.
- Major products like USYC, BUIDL, and USDY hold billions in combined assets.
- The proposed 2025 GENIUS Act may restrict stablecoin yield while favoring tokenized funds.
- Tokenized Treasuries are increasingly utilized as collateral within DeFi protocols like Ethena.
Background
Tokenized funds represent traditional financial assets, such as U.S. Treasury bills or money market instruments, brought onto a blockchain as digital tokens. These products allow investors to gain exposure to yield-bearing assets with the benefits of on-chain settlement and composability. Unlike standard stablecoins, which typically keep reserve yields for the issuer, tokenized funds distribute those returns directly to the token holders.