According to CoinDesk, tokenized Treasury notes have reached a market capitalization of $2 billion, doubling in size in less than five months after hitting the $1 billion milestone in March. This rapid growth highlights the increasing interest and potential in digital representations of U.S. government bonds, which can be traded as tokens on various blockchains such as Ethereum, Stellar, Solana, and Mantle.

The largest contributor to this surge is BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL), which became the largest tokenized Treasury fund just six weeks after its launch in late March, reaching a market cap of $375 million. Currently, BUIDL's assets stand at $503 million. Other significant players in the market include Franklin Templeton’s OnChain U.S. Government Money Fund (FOBXX) and Ondo’s U.S. Dollar Yield (USDY), both of which have also experienced substantial growth.

Data from RWA.xyz indicates that much of the recent growth has come from smaller issuers. Hashnote's offering increased by nearly 50% to $218 million over the past month, while OpenEden's and Superstate's products grew by 37% and 18%, respectively, both nearing a $100 million market cap.

Tokenized Treasury funds have become a favored investment option for crypto traders seeking to diversify their portfolios and capitalize on the rising Treasury yields over the past few years. The 10-year U.S. yield currently stands at 3.81%, up from 1.5% four years ago, while the 2-year yield has risen to 3.92% from near-zero levels in 2020 and 2021.