Tokenized Treasuries Explained: How They Work and the Largest Funds

Tokenized treasuries are tokens backed by US government debt, mostly Treasury bills that mature within a year. Each token is a share in a fund, or a note, whose assets are those bills plus some cash and repurchase agreements. They let crypto holders earn something close to the T-bill rate without leaving the blockchain, and they are the largest group of real-world assets after private credit.

How a tokenized treasury fund works

The structure looks a lot like an ordinary money market fund:

1. An asset manager runs a fund that buys short-term Treasuries. BlackRock, Franklin Templeton, WisdomTree, Fidelity, Invesco, Janus Henderson and crypto-native firms like Ondo, Superstate and OpenEden all run one.
2. A transfer agent records ownership onchain. Instead of a database at a fund administrator, the shareholder register is a token contract. Securitize does this for BlackRock’s BUIDL; Franklin Templeton runs its own for BENJI.
3. Investors subscribe with stablecoins or dollars and receive tokens. Redemptions go the other way, often in minutes rather than days.
4. Interest is passed through by raising the token price, minting new tokens, or adjusting balances.

Why they grew so fast

Three groups drove demand:

• Stablecoin issuers and DeFi protocols hold large dollar reserves and want yield on them. Ethena’s USDtb and Sky (formerly Maker) both hold tokenized treasuries.
• DAOs and crypto treasuries can earn a T-bill yield onchain without opening a brokerage account.
• Trading firms use fund tokens as collateral that earns interest while it sits on an exchange.

When short-term rates rose above 5% in 2023, the gap between a zero-yield stablecoin and a T-bill became too large to ignore, and tokenized treasury value grew from under $1 billion to several billion within about 18 months.

Ways interest is paid

Model	How it works	Examples
Accumulating price	Token price rises daily as interest accrues	USDY, OUSG, USYC
Distributed tokens	Price stays at $1; new tokens are paid out	BUIDL
Rebasing	Balance grows; price stays at $1	rebasing versions such as rUSDY

Who can buy them

Most tokenized treasury funds are securities, so the issuer checks who you are:

• Institutional funds such as BUIDL are limited to qualified purchasers and come with a high minimum investment (reported as $5 million at launch).
• Offshore notes such as USDY are open to individuals, but only outside the United States.
• Registered funds such as Franklin Templeton’s BENJI are available to US retail investors through the issuer’s app.

See who can buy RWAs for how accreditation and KYC work.

Risks to understand

• Rate risk is small but real. Bill yields move with Federal Reserve policy, so the yield you earn will change.
• Issuer and structure. Your claim depends on the fund’s legal structure and the transfer agent’s records.
• Liquidity. Redemption usually runs through the issuer. Secondary markets for most fund tokens are thin.
• Smart contract and chain risk. Multi-chain funds rely on bridges or separate deployments.

Tokenized treasuries vs stablecoins

A stablecoin pays you nothing; the issuer keeps the interest on its reserves. A tokenized treasury passes the interest to you, which is why it is regulated as a security and usually needs KYC. Read more in RWAs vs stablecoins.

Current figures

The table below is live. For the full list, every chain and the category’s history, see the tokenized treasuries page.