On February 24, 2026, the U.S. Securities and Exchange Commission granted WisdomTree exemptive relief to operate its Treasury Money Market Digital Fund (WTGXX) as the first registered mutual fund in history that can trade and settle 24 hours a day, 7 days a week, on blockchain rails. This is not ...
"This is a true innovation and improvement in the investor experience, and it demonstrates how blockchain can serve as a new set of rails for capital markets." — Will Peck, Head of Digital Assets, WisdomTree
On February 24, 2026, the U.S. Securities and Exchange Commission granted WisdomTree exemptive relief to operate its Treasury Money Market Digital Fund (WTGXX) as the first registered mutual fund in history that can trade and settle 24 hours a day, 7 days a week, on blockchain rails. This is not an incremental innovation. It is a structural break in how American capital markets operate — the first time a 1940 Investment Company Act fund has been permitted to bypass end-of-day NAV pricing in favor of continuous, intraday settlement at a stable $1.00 via a dealer-principal model.
This event did not arrive in isolation. It lands in the same month that BlackRock routed its $2.2 billion BUIDL tokenized Treasury fund through Uniswap's decentralized exchange — the world's largest asset manager making its first formal entry into DeFi. It lands weeks after the DTCC received SEC no-action clearance to begin a three-year pilot tokenizing securities from the Russell 1000, major ETFs, and U.S. Treasuries on distributed ledgers. And it lands as the total market for tokenized U.S. Treasury products has surpassed $10 billion, up from under $1 billion just two years ago.
The convergence of these events signals that tokenized funds have crossed from proof-of-concept to production infrastructure. The question is no longer whether traditional securities will migrate to blockchain rails — it is how fast, and who will control the plumbing.
The SEC's February 24 order granting WisdomTree exemptive relief is a regulatory first that deserves precise understanding. The order allows WTGXX — a registered mutual fund investing in short-term U.S. Treasury bills and government securities — to trade intraday at a stable $1.00 per share, settling instantly via blockchain using USDC stablecoin as the payment medium. WisdomTree Securities, the firm's broker-dealer subsidiary, received parallel FINRA approval to act as principal dealer, providing continuous liquidity.
This matters because mutual funds registered under the Investment Company Act of 1940 have historically been constrained to once-daily pricing at the fund's net asset value. The SEC effectively granted WisdomTree a carve-out from this 86-year-old framework, recognizing that blockchain-based settlement infrastructure can support continuous trading without the systemic risks that originally justified batch processing.
As of February 23, WTGXX had accumulated $730 million in assets under management with an expense ratio of 0.25%. The fund operates as a money market instrument with stable NAV, making it functionally equivalent to a yield-bearing stablecoin — but one that sits inside the full regulatory perimeter of U.S. securities law.
The implications extend beyond WisdomTree. This exemptive relief establishes a regulatory template. Every competing asset manager — BlackRock, Franklin Templeton, Fidelity — now has a clear precedent to petition for identical treatment. The SEC did not create a new rule; it granted case-specific relief. But in doing so, it validated the architecture: tokenized shares, blockchain settlement, stablecoin payment rails, and dealer-principal liquidity can coexist with existing securities regulation.
Two weeks before the WisdomTree approval, BlackRock made its own structural move. On February 11, the firm announced that shares of its $2.2 billion BUIDL tokenized U.S. Treasury fund would become tradable via UniswapX — the order-routing protocol developed by Uniswap Labs. BlackRock simultaneously disclosed a strategic investment in UNI, the governance token of the Uniswap ecosystem, placing the $14 trillion asset manager directly inside DeFi's governance infrastructure for the first time.
Robert Mitchnick, BlackRock's global head of digital assets, called the integration "a notable step in the convergence of tokenized assets with decentralized finance" and described it as "a major leap forward in the interoperability of tokenized USD yield funds with stablecoins."
The mechanics are important. Trading BUIDL on UniswapX is not permissionless — it requires investor whitelisting through Securitize, BlackRock's tokenization partner, with access restricted to qualified purchasers (those with $5 million or more in investable assets). Approved market makers source quotes through UniswapX's intent-based architecture, settling trades on-chain using stablecoins. This is a permissioned layer operating on permissionless infrastructure — a hybrid that may define how institutional capital ultimately interfaces with decentralized protocols.
BlackRock's purchase of UNI tokens is equally significant. This is the first DeFi governance token on BlackRock's balance sheet, giving the world's largest asset manager voting rights over a protocol that processes billions in daily trading volume. The UNI token surged 25% on the announcement before subsequently pulling back, illustrating the familiar pattern of crypto markets pricing narrative faster than fundamental value accrual.
These individual moves are part of a broader acceleration. The total tokenized U.S. Treasury market has crossed $10 billion in aggregate value as of February 2026, up from under $1 billion in early 2024 — representing roughly 10x growth in two years. The market is led by a concentrated group of issuers:
| Fund | Issuer | AUM | Key Feature | |------|--------|-----|-------------| | BUIDL | BlackRock / Securitize | ~$2.2B | DeFi-integrated via UniswapX | | USYC | Circle | ~$1.6B | DeFi-native distribution | | USTB | Superstate | ~$800M | On-chain Treasury exposure | | WTGXX | WisdomTree | ~$730M | First SEC-approved 24/7 trading | | FOBXX (BENJI) | Franklin Templeton | ~$500M+ | Multi-chain, stablecoin reserve eligible |
Franklin Templeton has been expanding aggressively, modifying two additional institutional money market funds — LUIXX and DIGXX — for blockchain compatibility in January 2026. LUIXX has been restructured to meet stablecoin reserve standards, while DIGXX now offers an on-chain share class with 24/7 settlement capabilities.
The competitive dynamics are shifting. Circle's USYC has edged past BlackRock's BUIDL as the largest tokenized Treasury product by some metrics, demonstrating that in this market, distribution rails and collateral integration matter more than brand recognition. The issuers winning flows are those whose tokens can be used as collateral inside DeFi protocols — not simply those with the largest parent companies.
Perhaps the most structurally significant development has received the least attention. In December 2025, the SEC's Division of Trading and Markets issued a no-action letter authorizing the Depository Trust Company (DTC) — a subsidiary of DTCC, which custodies over $100 trillion in assets — to operate a three-year pilot tokenizing DTC-custodied securities on supported blockchains.
The pilot, expected to launch in the second half of 2026, will cover securities from the Russell 1000 index, several high-volume ETFs, and a range of U.S. Treasury products. DTC participants will be able to elect to have their security entitlements recorded as tokens on distributed ledgers — what DTCC calls "Tokenized Entitlements" — using a system built in partnership with Digital Asset Holdings on the Canton Network.
DTCC's involvement transforms the market's infrastructure calculus. This is not a crypto-native startup tokenizing assets on the margin — it is the central nervous system of American capital markets running a sanctioned blockchain pilot. If the pilot succeeds, it creates a path for tokenized representations of the most liquid securities on earth to coexist with traditional book-entry systems.
During the pilot, tokens will not count for collateral or settlement purposes at DTC — a meaningful limitation that underscores this remains experimental. But the direction is clear: DTCC is building the plumbing for a future where tokenized and traditional settlement exist in parallel, with institutions choosing their preferred rail based on speed, cost, and programmability requirements.
The most economically consequential application of tokenized Treasuries is not trading — it is collateral. Tokenized T-bills are rapidly replacing native crypto assets as the preferred collateral layer inside DeFi lending markets, fundamentally changing the risk profile of on-chain credit.
Aave launched Horizon, a permissioned lending market allowing verified institutions to use tokenized U.S. Treasuries as collateral for borrowing stablecoins. By December 2025, Horizon had surpassed $580 million in net deposits, with a 2026 target of $1 billion. VanEck's tokenized Treasury fund now serves as collateral inside Aave's institutional lending lane.
Sky (formerly MakerDAO) allocated $1 billion to tokenized Treasuries, including $500 million to BlackRock's BUIDL, using them as reserve collateral for its DAI stablecoin. This represents a structural shift: the largest DeFi lending protocol now derives a significant portion of its backing from tokenized versions of U.S. government debt rather than volatile crypto assets.
Institutional DeFi and real-world asset TVL has reached approximately $17 billion, with tokenized treasuries and equities now surpassing DEXs as a collateral category. This is the quiet revolution — not the trading of tokenized funds, but their integration into the credit infrastructure of decentralized finance. Every dollar of tokenized Treasuries used as DeFi collateral represents a dollar of yield-bearing, government-backed security replacing volatile, unproductive crypto collateral.
Viewed through an economic-value lens, the tokenized fund boom raises a critical question: who captures the economics?
The current fee structures are revealing. WTGXX charges 0.25% annually — modest by traditional fund standards, but significant relative to the near-zero marginal cost of blockchain-based fund administration. BlackRock's BUIDL operates with a similar fee structure. These are management fees on government paper yielding approximately 3.5-4% — meaning issuers capture roughly 5-7% of the yield their products generate.
The real value extraction, however, may lie elsewhere. Securitize, which handles compliance and tokenization infrastructure for BlackRock and others, captures fees at the infrastructure layer. Uniswap captures trading fees when BUIDL changes hands on UniswapX. Stablecoin issuers like Circle earn float on the USDC used for settlement. Market makers earn spreads on continuous liquidity provision.
This value chain — issuer, tokenizer, exchange, stablecoin provider, market maker — represents a new financial stack that parallels but does not replace the traditional one. The key economic question is whether this parallel stack reduces total costs for end investors or simply redistributes fees among a different set of intermediaries. With tokenized fund shares settling in seconds rather than T+1, and trading 24/7 rather than during market hours, there are genuine efficiency gains. But the intermediary count has not meaningfully decreased — it has shifted.
The roughly 85-90% subsidy dependence that characterizes the broader blockchain economy does not apply to tokenized Treasury funds themselves — these products generate real yield from U.S. government securities. But the infrastructure they run on (Ethereum, Solana, and other settlement chains) still operates under the subsidy-driven economics that define most of the blockchain sector. This creates a paradox: economically self-sustaining products running on economically subsidized infrastructure.
The SEC has validated 24/7 blockchain-based mutual fund trading. WisdomTree's exemptive relief for WTGXX establishes a regulatory template that every major asset manager can now replicate. This is not a one-off — it is a precedent.
BlackRock's entry into DeFi governance is unprecedented. Purchasing UNI tokens places the world's largest asset manager inside decentralized protocol governance for the first time, blurring the line between institutional and decentralized finance.
The tokenized Treasury market has reached $10 billion and is projected to exceed $14 billion by year-end 2026. Growth is accelerating as distribution channels, DeFi integrations, and regulatory clarity converge.
DTCC's tokenization pilot is the infrastructure story to watch. The custodian of $100+ trillion in assets running a sanctioned blockchain pilot for Russell 1000 securities and Treasuries signals institutional intent at the highest level.
DeFi collateral is being quietly transformed. With Aave, Sky (MakerDAO), and others replacing volatile crypto collateral with tokenized Treasuries, the risk profile of on-chain lending is structurally improving — but introducing new dependencies on traditional finance infrastructure.
The intermediary stack is shifting, not shrinking. Fund issuers, tokenizers, DEXs, stablecoin providers, and market makers form a parallel financial stack. Efficiency gains are real, but total disintermediation remains elusive.
The events of February 2026 represent a structural inflection point for tokenized funds. The SEC's approval of 24/7 mutual fund trading on blockchain rails, BlackRock's integration with DeFi infrastructure, DTCC's tokenization pilot, and the crossing of $10 billion in tokenized Treasury AUM collectively signal that the convergence of traditional and decentralized finance has moved from strategic planning to operational reality.
But convergence is not synonymous with disruption. The emerging model is one of institutional capture — traditional finance actors using blockchain infrastructure on their own terms, with permissioned access controls, regulatory wrappers, and qualified-investor restrictions. Uniswap provides the rails, but BlackRock decides who rides them. WisdomTree settles in USDC, but only through its own broker-dealer subsidiary.
For the broader blockchain economy — still 85-90% dependent on token subsidies rather than genuine fee revenue — these tokenized fund products represent something rare: real economic value flowing through on-chain infrastructure. The question is whether this value will flow broadly enough to sustain the networks it runs on, or whether it will remain captured within walled gardens that happen to use blockchain as a settlement layer.
The 24/7 barrier has been broken. What gets built on the other side will determine whether tokenization fulfills its promise of open, efficient, programmable finance — or whether it becomes traditional finance with extra steps.
This report is published by webthreepedia.com for informational purposes. It does not constitute financial advice.