21co Analyst: Tokenized U.S. Treasury Bonds Will Reach $3 Billion by the End of the Year

Compiled by: Blockchain Knight

21co analyst Tom Wan believes that as the adoption of DeFi projects and decentralized autonomous organizations (DAOs) continues to rise, tokenized U.S. Treasuries will reach $3 billion by the end of 2024.

Wan believes that this trend is driven by the need for diversification and stability, especially high interest rates make these assets more attractive.

Currently, there are more than 15 tokenized U.S. Treasury products on the Ethereum Virtual Machine (EVM) chain, managing nearly $2 billion in assets.

Wan said: "DeFi projects are diversifying Treasuries and incorporating them into tokenized U.S. Treasuries and stablecoins. This is a sign that the Crypto asset ecosystem is shifting towards real-world assets (RWAs)."

Famous examples include Arbitrum and Maker DAO, which have allocated $27 million and $1 billion to these yield-bearing products, respectively.

Driven by financial giants like BlackRock and Securitize, these investments are part of a broader strategy to provide risk-free returns. Of course, the premise is not to exit the blockchain ecosystem.

BlackRock’s U.S. Dollar Institutional Digital Liquidity Fund (BUIDL) has recently become the largest tokenized Treasury fund, surpassing Franklin Templeton’s BENJI fund.

Since its launch at the beginning of the year, BUIDL’s market value has soared to nearly $500 million, reflecting the market’s growing demand for these assets.

The tokenized U.S. Treasury market has experienced explosive growth, with more than $2 billion in assets tokenized on blockchains such as Ethereum, Polygon and Solana.

Wan said this growth is expected to continue, predicting that the market value of tokenized U.S. Treasuries could exceed $3 billion by the end of 2024.

The integration of tokenized U.S. Treasuries with DeFi Treasuries represents a major development in the fusion of traditional finance and blockchain technology. As more DAOs and DeFi projects adopt these products, the industry is expected to achieve substantial growth, attracting investors seeking reliable returns in the volatile Crypto asset market.

This trend highlights the potential for tokenization of real-world assets to change the financial landscape, providing higher liquidity, faster transaction speeds and lower fees.

As major financial institutions explore blockchain technology, the adoption of tokenized assets is bound to reshape the future of the financial industry.