Tokenized US Treasuries Set to Surpass $3 Billion by 2024: Analyst

The market for tokenized US Treasuries is poised for significant growth, with projections indicating it could surpass $3 billion by the end of 2024.

Tom Wan, a research strategist at 21.co, attributed the uprise to the rising adoption of tokenized financial products, he noted in a recent post on X.

Wan claimed that the primary driver behind this rapid growth is the diversification of holdings by decentralized autonomous organizations (DAOs) into tokenized US Treasuries.

For tokenized treasuries to reach this $3 billion target, the market would need to nearly double in size by year-end.

Securitize and BlackRock Lead the Charge

Major global players like Securitize and BlackRock are leading the charge, offering tokenized treasury products that are attracting substantial interest.

“With the two projects allocating to tokenized US treasury, we could be seeing the total market cap of tokenized US treasury increasing to $3B+ by the end of 2024.”

Currently, tokenized US government securities have accumulated over $1.6 billion in total assets under management (AUM), according to data from Dune Analytics.

A significant portion of this market is driven by BlackRock’s USD Institutional Digital Liquidity Fund, ticker symbol BUIDL, which has become the largest tokenized treasury fund, surpassing Franklin Templeton’s fund.

BUIDL achieved this status within six weeks, amassing over $375 million in market capitalization during that period.

The fund now holds over $528 million, representing a 28.8% market share.

Wan believes BlackRock’s fund will significantly boost inflows into tokenized treasuries.

“As the strategy laid out by Securitize and BlackRock, they intend to provide diversification for the crypto ecosystem to access risk-free US treasury yield without needing to leave the blockchain ecosystem.”

$3B Tokenized US Treasuries by the end of 2024? We are seeing a trend of DeFi Project's DAO diversifying their treasury to RWAs, including stablecoins and Tokenized US Treasuries. With the maturity of tokenized US treasuries, over 15+ products on EVM Chains, and close to $2B… pic.twitter.com/rzRNvUNYWJ — Tom Wan (@tomwanhh) July 15, 2024

The potential of tokenization extends beyond US Treasuries.

The world’s largest management consulting firm predicts that tokenization could become a multi-trillion-dollar market.

Tokenization Market Could Reach $16T by 2030

A report by the Global Financial Markets Association (GFMA) and Boston Consulting Group estimates the global value of tokenized illiquid assets will reach $16 trillion by 2030.

Even more conservative estimates from Citigroup suggest that $4 trillion to $5 trillion worth of tokenized digital securities could be minted by 2030.

Recognizing this potential, major companies are making significant moves in the tokenization space.

Goldman Sachs, for instance, plans to launch three new tokenization products later this year, driven by growing client interest.

Some protocols have played a significant role in driving this growth, particularly in terms of active users.

Digital carbon market platforms like Toucan and KlimaDAO, as well as the real estate tokenization protocol Propy, have experienced substantial user growth.

It is worth noting that both public and private blockchains are witnessing the inclusion of various assets.

Some of the more notable examples include Franklin Templeton’s U.S. Government Money Fund expanding from Stellar to Polygon, Backed Finance launching a tokenized short-term U.S. treasury bond exchange-traded fund (ETF), and UBS Asset Management deploying a tokenized money market fund (MMF) on the Ethereum blockchain.