U.S. Treasuries represent the safest and most liquid assets in the world. A U.S. Treasury Bill (T-Bill) is a short-term, debt security issued by the U.S. government. This is considered a highly liquid and risk-free investment exempt from state and local taxes. There are also U.S. Treasury Funds, which are collective investment vehicles such as money market funds or exchange-traded funds (ETFs).While U.S. Treasuries play a key role in shaping central bank policy to personal investment portfolios, these products are wrought with challenges. Slow settlement times, excessive intermediation, and fragmented access are issues often associated with U.S. Treasury products.As a result, tokenized U.S. Treasuries are quickly gaining traction. According to rwa.xyz data, U.S. tokenized treasury products reached a new all-time high of $7.45 billion on Aug. 27. This number surpassed the previous peak of $7.42 billion recorded on July 15 this year. tokenized U.S. Treasuries have quietly grown 3x YoY to $7.5B, led by BlacRock’s BUIDL and Fidelity’s new Ethereum-based fund. major asset managers are building the liquidity rails for on-chain fixed income, positioning crypto to absorb traditional capital at scale pic.twitter.com/UIkHEfAO3E— Cartel (@cartelxbt) September 10, 2025 What Are Tokenized US Treasuries?Jürgen Blumberg, COO of RWA tokenization platform Centrifuge, told Cryptonews that Tokenized U.S. Treasuries are digital tokens issued on a blockchain network. These tokenized real-world assets (RWAs) represent ownership of U.S. government debt or shares/units of a fund whose assets are Treasuries.“Implementation varies—some tokens represent fractional direct ownership of T-Bills/T-Notes, while others represent ownership of a traditional fund (often domiciled offshore, for example, BVI or Abu Dhabi structures) where the fund holds Treasuries and the token mirrors fund units,” Blumberg said.Blumberg added that tokenized treasuries can live on public blockchains like Ethereum, or on permissioned systems, depending on the issuer and investor requirements. Ethereum currently secures $5.2 billion of treasury products, amounting to 70% market share.Tokenized Treasury Use CasesMany of the largest names in traditional finance (TradFi) asset management have already launched their own tokenized treasuries.For example, global investment manager BlackRock’s BUIDL fund is the world’s largest tokenized U.S. Treasury for institutional investors. BUIDL is a $2.2 billion on-chain money market fund for institutions and pays daily interest straight to wallets, 90% of which are on Ethereum.Brokerage firm Fidelity Asset Management also recently introduced a blockchain-based version of its Treasury money market fund. The new product, called the Fidelity Digital Interest Token (FDIT), mirrors one share of the Fidelity Treasury Digital Fund (FYOXX) and is issued directly on the Ethereum network. According to RWA.xyz, the fund began operating in August with a portfolio that consists entirely of U.S. Treasury securities and cash. Fidelity has launched $FDIT, a tokenized share of the Fidelity Treasury Digital Fund (FYOXX):Backed by U.S. TreasuriesRedeemable 1:1 for fund sharesNatively built on Ethereum+$200M, RWA is growing on Ethereum. https://t.co/SEypFhw84M pic.twitter.com/TiUVy3SQbX— fabda.eth (@fabdarice) September 7, 2025 Jesse Knutson, head of operations at Bitfinex Securities, told Cryptonews that he believes the primary purpose of tokenized Treasuries is to provide investors around the world with the ability to invest or save in U.S. T-Bills. This is especially important for investors who often struggle to access high-quality investment opportunities.Knutson explained that last year, Bitfinex Securities—which is a regulated platform offering tokenized investment products like equities, bonds, and investment funds—listed USTBL on the platform. USTBL is a tokenized offering of U.S. T-bills issued on El Salvador’s Digital Asset Law by NexBridge and listed on Bitfinex Securities’ secondary market.“The issuance was executed under El Salvador’s Digital Asset framework and allows investors to gain exposure to short-term U.S. Treasuries for as little as $1,” Knutson said.Tokenized U.S. Treasuries Solve Specific ChallengesIn addition to providing investors with access to U.S. Treasuries, these tokenized RWAs solve specific challenges traditional Treasury products face.Blumberg explained that tokenized U.S. Treasuries address several longstanding frictions in capital markets.“In traditional finance, Treasuries settle slowly and trade only during market hours. By issuing them as blockchain tokens, settlement becomes instant and markets stay open 24/7,” he said.Blumberg added that this is particularly valuable for crypto-native firms that operate around the clock with the need for immediate liquidity. Tokenized RWAs also reduce reliance on costly intermediaries, allowing faster and cheaper access to safe collateral.Another benefit is programmability. Blumberg pointed out that when Treasuries are tokenized, they can be integrated directly into smart contracts. “This unlocks use cases such as automated yield harvesting, collateralizing decentralized loans, instant swaps between assets, and automated treasury management,” he explained. For instance, Decentralized Autonomous Organizations (DAOs) have been increasingly allocating their treasuries into tokenized Treasuries to earn steady yield, while maintaining composability with the broader decentralized finance (DeFi) ecosystem. For example, Arbitrum DAO has diversified into various tokenized treasury products, while MakerDAO’s Spark initiative seeks to onboard a large amount of tokenized assets.Additionally, Blumberg mentioned that accessibility is an important feature provided by tokenized RWAs.“Tokenization allows fractional ownership, enabling smaller investors or global fintech platforms to access US Treasuries without navigating traditional intermediaries or large minimums,” he said.In regard to stablecoin issuers, holding tokenized Treasuries further offers a transparent and liquid way to back tokens with high-quality assets.“This is why tokenized Treasuries are quickly emerging as a preferred safe-yield instrument in both traditional and digital financial systems,” Blumberg said. Risks Associated with Tokenized US TreasuriesWhile tokenised Treasuries are currently one of the largest verticals within the RWA space, there are a number of risks associated. Knutson noted that despite the stability of the underlying asset, investors in tokenized U.S. Treasuries still face some degree of counterparty, regulatory, and technological risks.“Some issuers and platforms operate without full licensing, and over the years, we have seen numerous vulnerabilities exposed in smart contracts. Investors should always prioritize regulated platforms and issuers,” he stated.In addition, tokenized treasuries are exposed to several risk vectors. These include de-dollarization by foreign countries, geopolitical turmoil, fiscal spending policies, liquidity issues and interest rate decisions.Blumberg added that the regulatory environment for tokenized U.S. Treasuries is still emerging. Meanwhile, some key themes have already been made clear.“Regulators stress that tokenization does not alter the fundamental legal nature of an asset. If a Treasury or a Treasury-backed fund share is tokenized, it remains subject to securities or fund regulation. This means issuers must carefully structure their products to comply with applicable laws, whether through offshore fund vehicles, registered products, or permissioned investor frameworks,” Blumberg explained.Blumberg added that while regulators in the U.S. have been cautious about tokenized RWAs, guidance from international bodies—such as the Financial Stability Board—shows tokenization as both a potential innovation and a source of systemic risk if poorly managed.“Clearer rules around custody, settlement, and investor protections are expected to encourage larger institutions to participate. Some jurisdictions, such as Singapore and the UAE, are already experimenting with bespoke frameworks that enable regulated issuance of tokenized funds,” he pointed out. In other words, Blumberg believes that stronger regulation around tokenized RWAs, and Treasuries in particular, may accelerate growth. “This could open the door for tokenized Treasuries to move from pilot programs into mainstream financial infrastructure, further bridging traditional and digital capital markets,” he said. The post Tokenized Treasuries Hit $7.45B ATH – But Can Growth Outpace Risks? appeared first on Cryptonews.

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