21co analyst sees tokenized US treasuries hitting $3 billion by year-end

21co analyst Tom Wan believes tokenized US treasuries will hit $3 billion by the end of 2024 amid rising adoption among DeFi projects and Decentralized Autonomous Organizations (DAOs).

According to Wan, the trend is driven by a need for diversification and stability, especially as high interest rates make these assets attractive.

Currently, there are over 15 tokenized US Treasury products available on Ethereum Virtual Machine (EVM) chains, managing nearly $2 billion in assets under management (AUM).

Rising adoption

Wan said DeFi projects are increasingly diversifying their treasuries to incorporate tokenized US Treasuries and stablecoins — signaling a major shift toward real-world assets (RWAs) within the crypto ecosystem.

Notable examples include Arbitrum and MakerDAO, which have allocated $27 million and $1 billion, respectively, to these yield-bearing products. These investments are part of a broader strategy to provide risk-free yields without exiting the blockchain ecosystem, facilitated by financial giants like BlackRock and Securitize.

BlackRock’s USD Institutional Digital Liquidity Fund, known as BUIDL, has recently become the largest tokenized treasury fund, surpassing Franklin Templeton’s BENJI fund.

BUIDL’s market cap has soared to almost $500 million since its launch earlier in the year — reflecting the growing demand for these assets.

Poised for growth

The tokenized US Treasury market has experienced explosive growth, with over $2 billion in assets tokenized on blockchains such as Ethereum, Polygon, and Solana.

Wan said this growth is expected to continue, with projections indicating that the market cap for tokenized US Treasuries could exceed $3 billion by the end of 2024.

The integration of tokenized US Treasuries into DeFi treasuries represents a significant development in the convergence of traditional finance and blockchain technology. As more DAOs and DeFi projects adopt these products, the sector is poised for substantial growth, attracting investors seeking reliable returns in the volatile crypto market.

The trend highlights the potential for real-world asset tokenization to transform the financial landscape, offering increased liquidity, faster transactions, and lower fees. With major financial institutions exploring blockchain technology, the adoption of tokenized assets is set to reshape the future of finance.

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