The tokenized U.S. Treasury market crossed $15.35 billion in total value locked in May 2026, a 150-fold expansion from roughly $100 million in early 2024. Four issuers — Circle/Hashnote (USYC), BlackRock (BUIDL), Franklin Templeton (BENJI), and Ondo Finance (OUSG/USDY) — control the majority of a...
"We are moving to an environment where tokenized money-market fund shares can do double duty — earn yield while simultaneously serving as margin collateral." — Robert Mitchnick, Head of Digital Assets, BlackRock
The tokenized U.S. Treasury market crossed $15.35 billion in total value locked in May 2026, a 150-fold expansion from roughly $100 million in early 2024. Four issuers — Circle/Hashnote (USYC), BlackRock (BUIDL), Franklin Templeton (BENJI), and Ondo Finance (OUSG/USDY) — control the majority of assets. Their competitive strategies have diverged sharply: Circle won the AUM race through exchange collateral integrations, BlackRock is leveraging its brand and new SEC filings to expand product scope, Franklin Templeton competes on low fees and retail access, and Ondo has positioned itself as the distribution layer connecting all three to DeFi and global retail markets.
The sector's growth rate now exceeds that of stablecoins in absolute dollar terms for the first time. In the first two months of 2026, tokenized Treasuries added $2.12 billion in market cap versus $1.19 billion for stablecoins, according to RWA.xyz data. This shift signals a structural reallocation: institutional and DeFi capital is migrating from zero-yield stablecoins to yield-bearing Treasury tokens that can simultaneously serve as settlement collateral.
As of May 13, 2026, the tokenized U.S. Treasury market held $15.35 billion across 76 products with 58,658 holders, per RWA.xyz. The sector's 7-day average APY stood at 3.36%. Broader tokenized real-world assets (excluding stablecoins) crossed $32 billion in May 2026, a gain of more than 200% year-over-year.
The trajectory is notable. In Q1 2023, total tokenized Treasury value stood at approximately $380 million. By Q1 2025, it crossed $5 billion. The market tripled again in the 14 months that followed. This growth pattern tracks institutional capital flows: banks, exchanges, and asset managers are integrating tokenized Treasuries as functional infrastructure rather than experimental products.
Stablecoin dominance as the default on-chain dollar instrument is eroding. According to CEX.IO data, tokenized Treasuries are outpacing stablecoin growth — a structural shift driven by the fundamental economic argument that holding a zero-yield dollar when a 3.5-4.8% yielding alternative exists is an irrational capital allocation.
Circle USYC: $2.91B AUM — Market Leader
Circle acquired Hashnote in January 2025 and rebranded its tokenized Treasury product as USYC. As of May 2026, USYC holds $2.91 billion in AUM per RWA.xyz, making it the single largest tokenized Treasury product. The fund holds short-term U.S. Treasuries and overnight reverse repos, with USDC redemption rails handled by Circle. USYC is deployed on Ethereum, Sui, and the Canton Network.
Circle's path to the top was mechanical, not meritocratic. According to CryptoSlate, USYC overtook BUIDL in March 2026 primarily because it was wired into Binance as off-exchange collateral for institutional derivatives on BNB Chain. Distribution, not yield or fund quality, determined the outcome.
BlackRock BUIDL: $2.58B AUM — Institutional Anchor
Launched in March 2024 via Securitize, BUIDL crossed $500 million in AUM within six months and $1 billion by Q1 2025. It currently stands at approximately $2.58 billion. The fund is deployed across seven blockchain networks: Ethereum, Polygon, Arbitrum, Avalanche, Aptos, Optimism, and Solana. BUIDL has distributed over $100 million in cumulative dividends to token holders since inception.
BUIDL's competitive moat is institutional trust. Qualified purchasers face minimum investment thresholds and KYC requirements, limiting the product to institutional and high-net-worth capital. This is a feature, not a bug — it positions BUIDL as the default choice for regulated entities that need auditable, compliant exposure.
Franklin Templeton BENJI: ~$1.98B AUM — Retail Play
The Franklin OnChain U.S. Government Money Fund (FOBXX), represented by BENJI tokens, was the first U.S.-registered mutual fund to use a public blockchain as its system of record when it launched in April 2021. The fund maintains a stable NAV of $1.00 per share and is deployed across eight to nine blockchain networks including Stellar, Ethereum, Polygon, Avalanche, Arbitrum, Aptos, Base, Solana, and BNB Chain.
BENJI's competitive strategy centers on fee compression. At 0.15% management fee — the lowest in the category — Franklin Templeton is pricing for volume. BENJI and WTGXX are currently the only tokenized Treasury products that accept U.S. retail investors directly, though purchases are restricted to their issuer apps rather than open DeFi protocols.
Ondo Finance: ~$1.4B+ Combined AUM — Distribution Layer
Ondo operates two primary products. OUSG targets accredited investors with direct exposure to BlackRock's BUIDL fund, holding roughly $770 million to $1.1 billion in assets. USDY, designed for non-U.S. retail, has crossed $740 million in supply across Ethereum, Solana, Mantle, Sui, and Aptos. USDY pays approximately 4.65% APY as of April 2026.
Ondo's strategic position is distinct: it functions as a distribution and accessibility layer rather than a direct competitor. By wrapping BUIDL into OUSG and lowering the effective minimum investment from $5 million to roughly $5,000, Ondo democratizes access while maintaining the underlying institutional-grade asset quality.
| Product | Issuer | Management Fee | Approximate APY | Minimum Investment | U.S. Retail Access | |---------|--------|---------------|-----------------|--------------------|--------------------| | USYC | Circle/Hashnote | ~0.20% | 4.0-4.5% | Qualified purchasers | No | | BUIDL | BlackRock/Securitize | 0.20-0.50% | 4.0-4.5% | $5M (institutional) | No | | BENJI | Franklin Templeton | 0.15% | 4.0-4.3% | Low (retail-eligible) | Yes | | USDY | Ondo Finance | No explicit fee | ~4.65% | ~$5,000 effective | No (non-U.S. only) | | OUSG | Ondo Finance | ~0.15% | ~4.5% | Accredited investors | Limited |
Net yields cluster between 3.5% and 4.8% APY across the category, reflecting the underlying short-duration Treasury rate environment. Ondo's USDY delivers the highest net yield at approximately 4.65%, partly because it does not charge an explicit management fee — monetizing instead through the spread between wholesale Treasury rates and the rate passed to holders.
The fee structure reveals a classic platform economics dynamic. Issuers are compressing management fees toward zero to win distribution, knowing that the real value lies in controlling the collateral rails and settlement infrastructure that these tokens plug into.
The most consequential development in the tokenized Treasury market is not yield competition — it is the race to become the default collateral layer for centralized and decentralized trading infrastructure.
Exchange Integrations (Centralized):
DeFi Integrations (Decentralized):
The economic logic is straightforward: a desk that posts a tokenized Treasury as margin earns roughly 4% annualized yield while the same token performs collateral duty. With zero-yield stablecoins as the alternative, the capital efficiency gain is substantial. For a $100 million collateral position, the switch from USDC to a tokenized Treasury generates approximately $4 million in annual yield that was previously foregone.
On May 8, 2026, BlackRock filed with the SEC for two new tokenized products, per CoinDesk reporting:
BlackRock Daily Reinvestment Stablecoin Reserve Vehicle: A new fund investing in cash, short-term U.S. Treasuries, and overnight repos backed by Treasuries. The fund would issue "OnChain Shares" through a permissioned system connected to multiple public blockchains, with Securitize maintaining official ownership records. Minimum investment: $3 million.
Onchain share class for BlackRock Select Treasury Based Liquidity Fund: This would tokenize an existing $7 billion money-market fund, creating blockchain-native shares for a traditional product.
These filings signal BlackRock's intent to move beyond BUIDL as a standalone product and toward a broader tokenized fund infrastructure. The $7 billion money-market fund tokenization, if approved, would instantly become the largest single tokenized fund by AUM — nearly tripling USYC's current lead.
On March 25, 2026, Franklin Templeton and Ondo Finance announced a partnership to tokenize five ETFs for 24/7 trading through crypto wallets. The products cover equities, bonds, and gold, including Franklin Templeton's high-yield corporate ETF, focused growth ETF, and responsibly sourced gold ETF.
The initial launch targets Europe, Asia-Pacific, the Middle East, and Latin America. A U.S. launch is contingent on regulatory clarity around on-chain distribution of registered funds by third parties.
Ondo Global Markets, the platform powering the distribution, has accumulated over $700 million in TVL and processed $12 billion in cumulative trading volume across 70,000+ holders since September 2025. According to RWA.xyz, Ondo controls approximately 70% of the $950 million tokenized equity market.
This alliance represents a vertical integration play: Franklin Templeton manufactures the product, Ondo distributes it globally through crypto-native rails, and both parties benefit from the other's competitive advantage.
The multi-chain deployment strategy has become table stakes. BUIDL operates on seven chains, BENJI on eight to nine, and USDY on five. However, chain count alone is a vanity metric. What matters is which chains connect to which capital pools.
Ethereum remains the primary settlement layer for institutional capital. Solana and Base are emerging as retail and DeFi access points. BNB Chain matters primarily because of Binance's collateral framework. Aptos and Sui are positioning as next-generation institutional chains, though their current share of tokenized Treasury TVL remains small.
The accessibility spectrum is wide. BUIDL requires qualified purchaser status ($5 million minimum for entities). BENJI accepts U.S. retail through its app. USDY is open to non-U.S. retail with basic KYC. Ondo's wrapping of BUIDL into OUSG brings the effective minimum down to approximately $5,000. This stratification reflects a market segmenting along regulatory lines — institutional products in the U.S., retail products offshore.
The tokenized Treasury market's rapid growth carries several structural implications for the broader crypto economy:
Stablecoin pressure. Every dollar that migrates from USDC or USDT into a yield-bearing tokenized Treasury is a dollar that stablecoin issuers lose from their reserve base. Circle's dual position — issuing both USDC (zero yield to holders) and USYC (yield-bearing) — suggests the company is hedging against cannibalization of its own stablecoin franchise.
DeFi collateral substitution. As tokenized Treasuries become accepted collateral in lending protocols, they displace stablecoins from their role as the base-layer collateral asset. This reprices risk across DeFi: Treasury-backed collateral carries lower default risk than algorithmic or crypto-backed alternatives.
Fee compression endgame. With management fees already approaching 0.15%, the tokenized Treasury product itself is commoditizing. The sustainable margin will accrue to platforms that control distribution (exchanges, DeFi protocols) and custody (banks, qualified custodians), not to the fund issuers themselves.
Regulatory moat. SEC-registered products (BENJI) and SEC-filing issuers (BlackRock) have structural advantages in a market where the GENIUS Act and broader regulatory clarity are imminent. Unregistered products face potential compliance headwinds that could limit their addressable market in the U.S.
The tokenized Treasury market has moved past proof-of-concept into a genuine competitive arena where traditional asset managers, crypto-native protocols, and exchange platforms are fighting for control of a $15 billion and growing market. The competitive dynamics are clarifying: product manufacturing (the fund itself) is commoditizing rapidly, while distribution and collateral infrastructure are emerging as the defensible positions. Circle demonstrated this by winning the AUM race through a Binance integration, not through superior fund management. BlackRock's response — filing for tokenized shares of a $7 billion existing fund — represents the incumbents' counterattack: leveraging existing scale to bypass the organic growth curve entirely.
The economic logic driving this market is straightforward. Holding zero-yield stablecoins when 4%+ yield-bearing alternatives exist with comparable liquidity and superior collateral utility is an irrational allocation. As exchange and DeFi integrations proliferate, the friction cost of switching decreases, and capital continues migrating. The question is no longer whether tokenized Treasuries will displace a portion of stablecoin usage, but how large that portion will be and which issuers will capture the resulting fee streams.