Tokenized Treasurys Surpass $8.6B as Banks and Exchanges Promote Collateral Utilization

Tokenized Treasurys Growth: The market cap of tokenized U.S. Treasurys has increased to $8.6 billion, with significant contributions from BlackRock’s BUIDL and other funds, indicating a shift from passive yield to active collateral use in trading and credit transactions.

Institutional Adoption: Major financial institutions, including banks and exchanges, are beginning to integrate tokenized money-market funds into their operations, allowing these assets to be used as collateral in trading, thereby enhancing their role in traditional finance.

Infrastructure Advancements: The collaboration between Chainlink and Swift has led to the successful pilot of using ISO 20022 messaging for tokenized fund transactions, promoting interoperability between blockchain systems and traditional banking processes.

Market Dynamics and Challenges: While the market is diversifying, regulatory hurdles and operational limitations, such as specific redemption times and liquidity issues, continue to pose challenges for tokenized Treasurys, affecting their acceptance and trading conditions.