Tokenized US Treasurys Jump $1B Despite Debt Fears

Key Insights

• Tokenized US Treasurys added over $1 billion in 2026.
• Market capitalization expanded to $10.8 billion.
• Institutional infrastructure moved toward onchain settlement.

Tokenized US Treasurys added more than $1 billion in market value since the start of 2026, even as investors faced macro uncertainty and rising federal debt levels. RWA.xyz data showed total market capitalization climbed from $8.9 billion on Jan. 1 to $10.8 billion at the time of writing. The increase occurred while broader digital asset markets struggled with volatility.

The tokenized US Treasurys segment refers to government debt instruments issued as real-world assets represented onchain. These products track short-term or liquid Treasury exposure while settling through blockchain infrastructure. Despite turbulence across crypto markets in late 2025, this niche continued to attract capital flows, reflecting demand for yield-bearing assets tied to sovereign debt.

Institutional Demand Drove Market Expansion

Token Terminal records showed the sector expanded fiftyfold since 2024, supported by the March 2024 launch of BlackRock’s USD Institutional Digital Liquidity Fund. The fund’s capitalization exceeded $1.2 billion, positioning it among the largest tokenized Treasury vehicles. That expansion occurred as institutional allocators searched for programmable yield alternatives.

The tokenized US Treasury market has grown to over $10.8 billion. Source: RWA.xyz.

Federal Reserve Bank of St. Louis data indicated the World Uncertainty Index reached record highs during 2025. That spike reflected heightened investor concern about fiscal sustainability and economic conditions. Yet tokenized US Treasurys continued gaining value, suggesting that investors favored short-duration government exposure over risk assets.

Traditional Treasury markets form the backbone of global corporate finance due to their depth of liquidity. Companies and asset managers routinely use one-year instruments as cash equivalents. Onchain representations preserved that exposure while offering faster settlement and programmable transfer features.

Infrastructure Players Prepare Onchain Settlement

The Depository Trust and Clearing Corporation announced in December 2025 plans to introduce a tokenization service beginning with US Treasurys. Chief Executive Officer Frank La Salla said the platform would later expand to exchange-traded funds and equities after initial deployment on the Canton network. That development linked traditional clearing systems with blockchain rails.

Source: FRED, Federal Reserve Bank of St. Louis

Corporate filings showed the clearinghouse processed $3.7 quadrillion in transaction volume during 2024. Its entrance into tokenization signaled growing acceptance among legacy infrastructure providers. Rather than replacing conventional settlement layers, blockchain issuance appeared to integrate with existing clearing mechanisms.

Short-duration Treasurys remain widely used as cash proxies for institutions seeking liquidity preservation. Tokenization allowed issuers to embed these instruments directly into decentralized finance ecosystems. Supporters argued that onchain issuance could generate fee revenue for networks that mint and settle assets.

The growth trajectory also coincided with a broad drawdown in digital assets that began in October 2025. That divergence indicated capital rotated toward yield-backed instruments rather than speculative tokens. Investors appeared to favor stability and transparency over volatility during uncertain macro conditions.

Near-term attention will likely focus on whether capitalization can hold above current levels as fiscal debates intensify in Washington. Market participants will also monitor the rollout timeline for the clearing corporation’s tokenization platform and its integration with institutional custody systems.

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