TL;DR
- Market Growth: The tokenized US Treasuries market is projected to exceed $3 billion by the end of 2024, driven by increasing adoption and investment from decentralized autonomous organizations (DAOs).
- Major Players: Companies like Securitize and BlackRock are leading the charge, with BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL) becoming the largest tokenized treasury fund.
- Future Potential: The broader tokenization market could reach $16 trillion by 2030, with major financial institutions like Goldman Sachs planning new tokenization products to meet rising demand.
The market for tokenized US Treasuries is on the brink of significant expansion, with projections indicating it could exceed $3 billion by the close of 2024. Tom Wan, a research strategist at 21.co, attributes this surge to the increasing adoption of tokenized financial products, as highlighted in a recent post on X.
$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
Wan points to decentralized autonomous organizations (DAOs) as the primary catalyst behind this rapid growth. These organizations are diversifying their holdings by investing in tokenized US Treasuries, driving demand and liquidity in the market. To achieve the ambitious $3 billion target, the tokenized treasuries market would need to nearly double in size by year-end.
Securitize and BlackRock Lead the Way
Major players like Securitize and BlackRock are at the forefront, offering tokenized treasury products that attract substantial interest. Wan predicts that the combined efforts of these projects could push the total market cap of tokenized US Treasuries beyond $3 billion by the end of 2024.
Currently, tokenized US government securities have amassed over $1.6 billion in total assets under management (AUM), according to data from Dune Analytics. BlackRock’s USD Institutional Digital Liquidity Fund (ticker symbol BUIDL) stands out as the largest tokenized treasury fund, surpassing Franklin Templeton’s fund.
BUIDL achieved a market capitalization of over $375 million within just six weeks, and it currently holds $528 million, representing a 28.8% market share. Larry Wan believes that BlackRock’s new fund will significantly boost inflows into tokenized treasuries.
Beyond US Treasuries: The Multi-Trillion-Dollar Tokenization Potential
The potential of tokenization goes far beyond US Treasuries. Industry leaders estimate a massive market for tokenized assets, with a report by the Global Financial Markets Association (GFMA) and Boston Consulting Group predicting a global value of $16 trillion for tokenized illiquid assets by 2030.
Major financial institutions are recognizing the potential of tokenization, with Citigroup’s conservative estimates predicting $4 trillion to $5 trillion worth of digital securities to be tokenized by 2030.
Three new tokenization products are planned for launch by Goldman Sachs this year, reflecting rising client demand. This growth is fueled by protocols like Toucan, KlimaDAO, and Propy, which have attracted active users. From real estate to short-term US Treasuries, both public and private blockchains are seeing a rise in asset tokenization.
As the tokenization landscape evolves, the potential impact on global finance remains substantial, promising a transformative shift in how we perceive and interact with traditional assets.
