Source: cryptoslate
Compiled by: Blockchain Knight
21co analyst Tom Wan believes that as the adoption of DeFi projects and decentralized autonomous organizations (DAOs) continues to rise, tokenized U.S. Treasury bonds will reach $3 billion by the end of 2024.
Wan believes the trend is driven by a need for diversification and stability, especially as high interest rates make these assets more attractive.
Currently, there are more than 15 tokenized U.S. Treasury products on the Ethereum Virtual Machine (EVM) chain, managing nearly $2 billion in assets.
Wan said: “DeFi projects are diversifying treasuries and incorporating them into tokenized U.S. Treasuries and stablecoins. This is a sign that the Crypto asset ecosystem is shifting towards real world assets (RWAs).”
Notable examples include Arbitrum and Maker DAO, which allocated $27 million and $1 billion respectively to these yield-producing products.
Driven by financial giants like BlackRock and Securitize, these investments are part of a broader strategy to provide risk-free returns — provided, of course, that they do not exit the blockchain ecosystem.
BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL) recently became the largest tokenized Treasury fund, surpassing Franklin Templeton’s BENJI fund.
Since its launch at the beginning of the year, BUIDL’s market capitalization has surged to nearly $500 million, reflecting the growing demand for these assets.
The tokenized U.S. 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, predicting that the market value of tokenized U.S. Treasuries could exceed $3 billion by the end of 2024.
The integration of tokenized U.S. Treasury bonds and DeFi Treasury bonds represents a significant development in the integration of traditional finance and blockchain technology. As more DAOs and DeFi projects adopt these products, the industry is expected to achieve substantial growth, attracting investors seeking reliable returns in the volatile Crypto asset market.
The trend highlights the potential for tokenization of real-world assets to transform the financial landscape, providing greater liquidity, faster transactions, and lower fees.
As major financial institutions explore blockchain technology, the adoption of tokenized assets will surely reshape the future of the financial industry.
