Tokenized Treasuries cross $8.6B as banks and exchanges push collateral use

From yield to collateral: The $8.6 billion turning point

Tokenized U.S. Treasuries, the largest class of real-world assets (RWA) after stablecoins, have entered a new phase. Tokenized money-market funds (MMFs), which pool cash into short-term U.S. government securities, are shifting from passive yield to collateral for trading, credit and repo transactions. 

As of late October, the total market cap of tokenized Treasuries reached $8.6 billion, up from $7.4 billion in mid-September. The increase was led by BlackRock’s BUIDL, which reached about $2.85 billion, followed by Circle’s USYC at $866 million and Franklin Templeton’s BENJI at $865 million. Fidelity’s newly launched tokenized MMF also showed impressive growth and rose to $232 million.

Institutional adoption: Exchanges, banks and custodians step in

Digital representations of Treasury bills are starting to move through the same settlement and margin systems that support traditional collateral markets. The first practical test of fund-as-collateral came in June, when BUIDL was approved on Crypto.com and Deribit. By late September, Bybit extended the concept, announcing it would accept QCDT, a DFSA-approved tokenized money-market fund backed by U.S. Treasuries, as collateral. The token can be posted by professional clients on the exchange’s trading platform in place of cash or stablecoins. This allows them to earn the underlying yield from the Treasury fund and maintain trading exposure.

In traditional banking, DBS became the first to move toward actively testing tokenized funds. The Singapore lender confirmed that it will make Franklin Templeton’s sgBENJI, which is the onchain version of its U.S. Government Money Fund, available for trading and lending on the DBS Digital Exchange, together with Ripple’s RLUSD stablecoin. The bank is also running pilot transactions to use sgBENJI as repo and credit collateral. The project turns tokenized money-market funds from a passive investment into a working part of the bank’s financing infrastructure.

Infrastructure and messaging: The hidden engine of tokenized finance

The infrastructure that links banks and blockchain systems has also advanced. Chainlink and Swift, working with UBS Tokenize, completed a pilot that processed subscriptions and redemptions for a tokenized fund using standard ISO 20022 messages. In simple terms, the test showed that the same message format banks already use to settle securities and payments can now trigger smart-contract actions on a blockchain.

The pilot marks a clear step toward interoperability. Tokenized funds have so far existed in separate digital systems that required custom links to connect with banks. Using ISO 20022 as the message format gives both sides a shared language. It allows custodians and fund administrators to move tokenized assets through the same settlement and reporting processes already used for traditional securities.

For investors and institutions, this means tokenized Treasuries are starting to fit into the normal financial workflow rather than sitting apart as a crypto experiment.

Market composition and frictions

The market is still led by a handful of large funds, but it is slowly diversifying. BlackRock’s BUIDL still holds the largest share of the market at about 33% of total tokenized Treasuries. Franklin Templeton’s BENJI, Ondo’s OUSG and Circle’s USYC each account for about 9% to 10%. 

A quick look at the table below shows how this balance is starting to shift. The space once dominated almost entirely by one instrument now has several regulated managers sharing meaningful portions of the market. This distribution spreads liquidity and makes collateral acceptance more practical for venues and banks that prefer diversified exposure.