The tokenized U.S. Treasury market reached $11 billion in March 2026, up 27% year-to-date and more than 10x larger than two years prior. Circle's USYC token, acquired via its purchase of Hashnote in January 2025, overtook BlackRock's BUIDL fund as the largest single product at approximately $2.2 ...
"Tokenized treasuries and repo as collateral is a major emerging use case and we are proud of how quickly this has grown." — Jeremy Allaire, CEO, Circle
The tokenized U.S. Treasury market reached $11 billion in March 2026, up 27% year-to-date and more than 10x larger than two years prior. Circle's USYC token, acquired via its purchase of Hashnote in January 2025, overtook BlackRock's BUIDL fund as the largest single product at approximately $2.2 billion in supply. BUIDL's market share fell from a 46% peak in May 2025 to 18% by March 2026. The shift was driven not by yield differentials — both products hover near 3.4–3.5% APY — but by distribution mechanics: Binance adopted USYC as off-exchange collateral for institutional derivatives, routing $1.84 billion of USYC supply through BNB Chain alone.
The competitive realignment coincides with a structural transformation. Tokenized Treasuries now function as the collateral backbone of decentralized finance, with Sky (formerly MakerDAO) holding over $2 billion in RWA vaults and generating 60% of protocol revenue from real-world assets. An April 2026 IMF note by Tobias Adrian characterized the trend as "a structural reallocation of trust within the financial system," while warning that speed and automation "introduce new vulnerabilities" with stress events likely to "unfold faster, leaving less time for discretionary intervention."
Tokenized U.S. Treasury products crossed $10 billion in total market value in January 2026, according to data tracked by RWA.xyz. By mid-March 2026, the figure stood at $11 billion, reflecting 27% growth since the start of the year. For context, the category held under $1 billion in early 2024, making the expansion roughly 11x in two years.
The broader tokenized real-world asset market — encompassing credit, equities, real estate, and commodities — reached $27.6 billion in April 2026, according to SpaceCrypto data. Tokenized Treasuries account for approximately 40% of this total, making them the single largest RWA category on public blockchains.
The acceleration is notable against the backdrop of a declining federal funds rate. The Fed dot plot from March 2026 projects a low-3% fed funds rate by 2027, meaning yields on short-term Treasuries have compressed from 2024 peaks. Despite this, capital continues to flow into tokenized products, suggesting the value proposition extends beyond yield into collateral utility, 24/7 liquidity, and settlement efficiency.
The market now supports approximately 60 distinct tokenized Treasury offerings across multiple chains, held by over 57,000 unique wallet addresses.
The most consequential shift in Q1 2026 was Circle's USYC token overtaking BlackRock's BUIDL fund as the largest tokenized Treasury product. As reported by CoinDesk on March 13, 2026, USYC expanded to approximately $2.2 billion in supply, surpassing BUIDL's approximately $2 billion.
The reversal traces back to Circle's January 2025 acquisition of Hashnote, the original USYC issuer, for an undisclosed sum. At the time of acquisition, Hashnote managed approximately $1.3 billion. Circle then leveraged its existing USDC distribution infrastructure — particularly its relationship with Binance — to scale USYC aggressively.
The critical inflection came in July 2025, when Binance introduced USYC as off-exchange collateral for institutional derivatives trading through its Binance Banking Triparty and Ceffu custody platforms. Supply on BNB Chain subsequently swelled to $1.84 billion, accounting for roughly 84% of USYC's total supply growth. According to CryptoSlate, the initial overtaking occurred on January 22, 2026, when USYC's AUM hit $1.69 billion versus BUIDL's $1.684 billion — a gap of just $6 million that has since widened substantially.
BUIDL's market share trajectory tells the story in percentage terms: from a 46% peak in May 2025 to 18% by March 2026. The fund's absolute AUM grew — from roughly $1 billion in mid-2024 to $2 billion by early 2026 — but the market grew faster around it. BlackRock's product took six months to reach $500 million, four more months to hit $1 billion, and five months to double to $2 billion. By contrast, USYC's growth was compressed into a shorter window through exchange-driven distribution.
The tokenized Treasury market has moved beyond a two-player contest. Key products as of April 2026:
| Product | Issuer | Est. AUM | Chain(s) | Notes | |---------|--------|----------|----------|-------| | USYC | Circle (Hashnote) | ~$2.2B | Ethereum, BNB Chain | Largest single product | | BUIDL | BlackRock/Securitize | ~$2.0B | Ethereum, Aptos, Polygon, Avalanche | Market share fell from 46% to 18% | | OUSG/USDY | Ondo Finance | ~$1.4B | Ethereum, Solana, Sei, others | USDY yields ~4.25% APY | | BENJI (FOBXX) | Franklin Templeton | ~$742M | Stellar, Ethereum, Avalanche, Aptos, others | First U.S.-registered mutual fund on public blockchain | | VBILL | VanEck/Securitize | N/A | Ethereum, Avalanche, BNB, Solana | $100K min on most chains; $1M on Ethereum | | USTB | Superstate | N/A | Ethereum | Delivered 4.11% annualized in 2025 |
Sky (MakerDAO) remains the single largest consumer, with over $2 billion in tokenized Treasuries, money market funds, and structured credit in its RWA vaults. Approximately $400 million of BUIDL's AUM is deposited in DeFi protocols as collateral or yield-bearing reserves, according to on-chain data reported by CoinDesk.
Ethereum hosts the majority of tokenized Treasury value, accounting for over 56% of all tokenized asset value according to MetaMask research data. However, the share is declining as issuers pursue multi-chain deployment strategies.
BNB Chain has emerged as the second-largest venue, driven almost entirely by USYC's Binance integration. The $1.84 billion in USYC supply on BNB Chain makes it the single largest tokenized Treasury deployment on any non-Ethereum chain.
Stellar retains relevance through Franklin Templeton's BENJI product, which was among the first tokenized Treasury funds to launch. Solana hosts Ondo's products and VanEck's VBILL. Avalanche and Polygon support multi-chain deployments from BlackRock and VanEck. Aptos gained BUIDL exposure when BlackRock expanded the fund's blockchain availability.
The multi-chain expansion reflects a pragmatic distribution strategy: issuers deploy wherever they find institutional demand or exchange partnerships, rather than optimizing for any single chain's technical characteristics.
The most structurally significant development is the transition of tokenized Treasuries from standalone yield products to core DeFi primitives. CryptoSlate characterized tokenized Treasuries as having "become the spine of this stack, functionally replicating their role in the $5 trillion US repo market."
Three integration patterns dominate:
Protocol Treasury Reserves. Sky (MakerDAO) generates 60% of its protocol revenue from RWA holdings. The protocol's RWA vaults hold tokenized Treasuries, money market funds, and structured credit, with yield flowing into the Maker surplus buffer to fund DAI savings rate distributions.
Lending Collateral. Aave integrated VanEck's VBILL as eligible collateral in its Horizon market in November 2025, powered by Chainlink's NAVLink oracle for pricing. Lending protocols now offer loan-to-value ratios of 70–80% on Treasury-backed tokens, per Blocklr research, allowing borrowers to access liquidity with relatively low volatility risk.
Exchange Collateral. Binance's adoption of USYC for off-exchange institutional derivatives collateral is the clearest example. This transforms a yield-bearing asset into margin, allowing institutional traders to earn returns on capital that would otherwise sit idle in cash or stablecoins.
With the Fed funds rate in the low-3% range as of Q1 2026, yields on both tokenized and traditional money market products have converged:
| Product Type | Representative Yield | Expense Ratio | |--------------|---------------------|---------------| | BlackRock BUIDL | ~3.43% (7-day APY) | N/A (institutional) | | Franklin Templeton BENJI | ~3.54% (7-day APY) | Mutual fund fees apply | | Superstate USTB | 4.11% (2025 annualized) | N/A | | Ondo USDY | ~4.25% APY | N/A | | Vanguard VUSXX (traditional) | 3.7% (7-day SEC yield) | 0.07% | | Northern Trust NCGXX (traditional) | 3.8% (7-day SEC yield) | Fee waiver in effect |
The yield differential between tokenized and traditional products is minimal — typically within 20–40 basis points. The competitive advantage of tokenized products lies elsewhere: 24/7 settlement, composability with DeFi protocols, cross-chain portability, and use as margin collateral. These properties create utility value that pure yield comparison fails to capture.
The IMF weighed in on April 1, 2026, with a note authored by Tobias Adrian, Financial Counselor and Director of the Monetary and Capital Markets department. Adrian characterized tokenization as "a structural shift in financial architecture" and "a structural reallocation of trust within the financial system."
The note flagged three primary risks:
Speed amplification. "Atomic settlement and enhanced transparency reduce some traditional risks, but speed and automation introduce new vulnerabilities. Stress events are likely to unfold faster, leaving less time for discretionary intervention."
Stablecoin fragility. Adrian compared stablecoins to money market funds: "functional in calm conditions but susceptible to runs the moment confidence breaks down." Stablecoins now process $1.8 trillion per month, making them systemically relevant infrastructure.
Single-ledger concentration. A shared ledger could become "a critical node whose failure could disrupt the entire market," replacing bilateral connections while concentrating vulnerability.
Adrian proposed a five-pillar policy framework: anchoring tokenized settlement in safe assets (e.g., wholesale CBDCs), applying consistent regulation across equivalent activities, adapting central bank liquidity tools for automated environments, mandating audits of systemically important smart contracts, and building override mechanisms that allow emergency pauses.
Separately, major U.S. exchanges including NYSE and Nasdaq are advancing tokenization initiatives for securities trading and collateral management, suggesting traditional market infrastructure operators view tokenization as a competitive necessity rather than an optional experiment.
The tokenized Treasury market has crossed from proof-of-concept to institutional default. The $11 billion in on-chain Treasuries represents a small fraction of the $27 trillion traditional U.S. Treasury market, but the growth rate — 11x in two years — signals persistent structural demand.
The Circle-BlackRock leadership reversal demonstrates that distribution rails, not brand equity, determine market share in tokenized finance. Circle's control of both USDC (the dominant stablecoin for institutional settlement) and USYC (the largest tokenized Treasury product) creates a vertically integrated stack from liquid cash to yield-bearing collateral, connected through a single API.
The IMF's intervention adds a regulatory dimension. Adrian's characterization of tokenization as a "structural reallocation of trust" implicitly acknowledges that the technology is no longer experimental. The policy recommendations — wholesale CBDCs as settlement anchors, smart contract audits, emergency pauses — suggest regulators are preparing frameworks for a future in which tokenized assets constitute a meaningful share of collateral infrastructure.
For protocol treasuries, institutional traders, and asset managers, the question is no longer whether to hold tokenized Treasuries. It is which product, on which chain, with which collateral integration. The market has shifted from whether to how.