Tokenized Treasuries Top $7B as Institutional Products Expand

Tokenized US Treasuries reached more than $7 billion on-chain by June 2026, up from about $1 billion in January 2025. Growth followed a regulatory change and new product launches from large asset managers that targeted institutional users.

The GENIUS Act prohibited permitted payment stablecoins from paying yield, creating a regulatory divide between settlement tokens and yield-bearing reserve instruments. BlackRock, Franklin Templeton, Fidelity, State Street and Ondo Finance introduced tokenized or purpose-built reserve products to meet institutional demand for on-chain Treasury exposure that yields interest while remaining backed by US government debt.

BlackRock’s BUIDL is the largest product with over $2.5 billion in assets. Franklin Templeton’s BENJI holds about $700 million. Ondo Finance’s USDY and OUSG together account for roughly $900 million, with USDY near $500 million and OUSG near $400 million. Superstate’s USTB has around $200 million and Mountain Protocol’s USDM about $150 million. State Street’s SSCXX and Fidelity’s Reserves Digital Fund launched in mid-June 2026 as money market options aimed at stablecoin issuers; SSCXX debuted June 17, 2026, and Fidelity’s fund launched June 19, 2026.

Product structures vary. SEC-registered funds such as BlackRock BUIDL, Franklin Templeton BENJI and Superstate USTB operate under registered fund rules and report daily yield accruals near 4.5% to 5% APY. BUIDL enforces a $5 million minimum and uses BNY Mellon for custody and Fireblocks for digital custody services. Ondo’s USDY is an SPV with a bank-bankruptcy-remote design and is not SEC-registered; it is available across multiple chains and supports Nexus-enabled instant redemptions. OUSG is backed primarily by BUIDL and offers instant minting and redemptions. Mountain Protocol operates under Bermuda licensing for non-U.S. institutional clients. Fidelity’s Reserves Digital Fund carries a 0.18% expense ratio. State Street marketed SSCXX to stablecoin issuers with crypto-native validation from Anchorage Digital.

Institutional use cases include corporate treasury cash management, stablecoin issuer reserve compliance and use as high-quality collateral in institutional DeFi protocols. Treasury-backed tokens let treasurers earn Treasury yields on idle stablecoin balances without off-chain settlement risk. Stablecoin issuers can place reserves in Rule 2a-7 government money market funds or in on-chain tokenized Treasury products that can be verified and managed programmatically. Tokenized Treasuries are being posted as collateral in lending and staking protocols, enabling Treasury yield to be combined with protocol-level yields.

Multi-chain deployment has become common. BUIDL runs on Ethereum, Polygon, Avalanche, Aptos, Arbitrum and Optimism. USDY is available on Ethereum, Solana, Mantle, Sui and Arbitrum. BENJI operates on Stellar and Polygon. These deployments let institutions access Treasury exposure on the chains where they operate.

Operational benefits cited by market participants include 24/7 instant redemptions provided by Nexus-enabled products, direct DeFi composability without converting to standard stablecoins, on-chain verification of reserve holdings and single-API integrations for position management. For stablecoin issuers with same-day redemption obligations under the GENIUS Act, instant on-chain settlement addresses an operational requirement.

Risk considerations noted by market participants include smart contract risk at the token issuance layer even when underlying reserves are regulated; market concentration in a single large product such as BUIDL, which could create systemic exposure; regulatory classification risk for SPV-structured products if authorities require registration; different operational and credit risk profiles for non-SEC products compared with SEC-registered funds; and minimum investment thresholds that limit access for smaller institutional or corporate treasuries.