Tokenized US Treasuries Grew to $845 Million in 2023

In 2023, the United States saw a significant surge in tokenized Treasury securities, with a 641% increase reported by the digital asset analytics platform CoinGecko.

CoinGecko's 2024 report, "Rise of Real World Assets in Crypto," unveiled on March 21, outlines the expansion in the tokenization of real-world assets (RWA).

According to CoinGecko, the value of tokenized U.S. Treasury securities escalated from $114 million at the start of 2023 to $845 million by year-end, marking a substantial growth in the blockchain representation of U.S. Treasury bonds.

These tokenized securities represent real-world assets such as stocks and bonds in digital form.

An example provided is the Ondo Short-Term US Government Bond Fund, which employs the OUSG token to denote ownership and earnings within the fund.

The report identifies Franklin Templeton as the dominant issuer of tokenized Treasury securities, having released $332 million in tokens through its On-Chain U.S. Government Money Fund, capturing 38.6% of the market.

Franklin Templeton also made headlines as one of the ten entities to introduce a spot Bitcoin ETF in the U.S. in January and has applied for launching an Ethereum ETF, with the application submitted on February 12.

CoinGecko's report also points to the rise of protocols offering yield-bearing stablecoins supported by U.S. Treasury bills.

For instance, Mountain Protocol's USDM tokens saw an increase from $26,000 to $154 million since their inception in September 2023.

The majority of tokenized U.S. Treasuries are found on the Ethereum network, accounting for 57.5% of such tokens.

Meanwhile, firms like Franklin Templeton and WisdomTree Prime have opted for the Stellar network for their tokenized securities, which now holds 39% of the market share.

However, the momentum of growth in tokenized treasuries decelerated in 2024, with a modest 1.9% increase observed in January, leading to a market capitalization of $861 million by February 1.

Beyond tokenized treasuries, the report also notes the emergence of commodity-backed tokens, reaching a market cap of $1.1 billion by February 1, with Tether Gold (XAUT) and PAX Gold (PAXG) dominating 83% of the market for tokenized precious metals.

Furthermore, an innovative project has embarked on the tokenization of uranium, offering digital tokens redeemable for the actual metal.

Sources:

https://cointelegraph.com/news/tokenized-us-treasuries-845-market-cap-2023-coingecko

https://www.coingecko.com/research/publications/rwa-report-2024