Tokenized US Treasury products are the largest and fastest-growing category of on-chain real-world assets. They crossed $12 billion in on-chain assets under management in early 2026 and are approaching $15 billion. They are used by retail investors earning yield, by institutions managing collateral, by stablecoin protocols backing their reserves, and by DeFi lending protocols as collateral assets. This guide covers what they are, how they work, who the major products are, how to access them, and what the risks are.
Last updated: October 6, 2026. AUM figures change frequently — verify against live trackers before making investment decisions.
What a Tokenized Treasury Product Is
A tokenized Treasury product is an on-chain token that represents a beneficial interest in a fund or vehicle holding short-duration US government securities — Treasury bills, Treasury notes, government money market instruments, or repurchase agreements backed by Treasuries. The underlying securities are held off-chain at a regulated custodian. The token is the on-chain representation of a claim on those securities and their yield.
They work similarly to a money market fund: the holder earns yield approximately equal to the short-term Treasury rate (currently around 4.5% annualized, tracking the federal funds rate), minus fees. The yield accrues continuously and is typically reflected either as a rising token price (NAV-based) or as periodic distributions.
The key difference from a traditional money market fund: the token settles on a blockchain. This enables same-day or instant settlement (versus T+2 for traditional fund shares), 24/7 availability (traditional funds have cut-off times), and use as collateral in crypto-native environments that cannot interface with traditional fund infrastructure.
The Major Products (as of October 2026)
| Product | Issuer | AUM (approx.) | Min. | Who Can Hold |
|---|---|---|---|---|
| BUIDL | BlackRock / Securitize | ~$2.5B | $5M | Qualified purchaser |
| BENJI (FOBXX) | Franklin Templeton | ~$2.5B | ~$20 | US retail + institutional |
| USYC | Hashnote / Circle | ~$3B | $100K | Accredited / QP |
| OUSG | Ondo Finance | ~$625M | $100K | Qualified purchaser |
| USDY | Ondo Finance | ~$2.1B | $500 | Non-US (Reg S) |
| USTB | Superstate | ~$400M | $100K | Accredited investor |
Sources: rwa.xyz live data, platform disclosures. AUM figures as of mid-to-late 2026; verify at rwa.xyz before acting on them.
How They Work: From Purchase to Yield
Onboarding. Every tokenized Treasury product requires KYC/AML verification before you can hold tokens. The platform checks identity, accreditation status (for products requiring it), and jurisdiction eligibility. This is not crypto — you cannot buy anonymously. Onboarding typically takes one to five business days.
Minting. Once onboarded, you send stablecoins or fiat to the platform. The platform invests the capital in the underlying Treasury securities and mints tokens representing your share of the fund. Your wallet is added to the permissioned transfer list — you cannot send the tokens to a wallet that has not passed KYC.
Yield accrual. Most products accrue yield by continuously increasing the token's NAV (the price per token rises over time to reflect accumulated interest) rather than distributing yield as separate payments. BENJI uses this model. Some products distribute yield periodically to a separate wallet.
Redemption. You send tokens back to the platform, which redeems the underlying Treasury position and returns fiat or stablecoins to you. Most institutional products offer same-day USDC redemption during US banking hours through dedicated liquidity facilities. BENJI offers instant redemption. Settlement windows outside banking hours vary by product.
The Infrastructure Layer: How These Products Are Used Beyond Yield
The yield is only part of the story. The more structurally significant development in 2026 is the use of tokenized Treasuries as collateral infrastructure.
As DeFi reserve collateral. Ethena's USDtb stablecoin is backed by BUIDL. Sky (formerly MakerDAO) uses BUIDL in its reserve allocation. Frax holds BUIDL. These are structural relationships — stablecoin protocols using tokenized Treasuries as reserve backing rather than volatile crypto collateral.
As exchange trading collateral. BUIDL is accepted as collateral on Crypto.com and Deribit. BENJI is accepted on Bybit (since September 28, 2026) and Binance. OUSG through BUIDL is accepted across multiple DeFi lending protocols. Institutions can earn Treasury yield while using the position as margin for crypto trading — a yield-on-idle-collateral model that did not exist before tokenization.
As the underlying of other tokenized products. OUSG holds BUIDL as its primary underlying asset. Ondo's Intelligent Portfolios, launched September 24 with BlackRock-developed model strategies, are built on Ondo Stocks — which include tokenized Treasury exposure. The tokenized Treasury layer is becoming the base layer of a growing tokenized asset stack.
Pantera's Finding: 81% Sits Idle
Pantera Capital's Q1 2026 State of Tokenization report found that 81% of tokenized Treasury value is held in wallets without trading on a secondary market. This is not a flaw — it reflects what these products actually are: yield-bearing hold instruments, not actively traded securities. All six products in the table above are permissioned tokens. Transfers require the receiving wallet to have passed KYC. There is no open secondary market.
The 19% that does move is doing so through collateral programs, protocol integrations, and institutional portfolio management — not retail secondary trading. The liquidity that matters in this market is not price liquidity but redemption liquidity: the ability to convert tokens back to cash or stablecoins quickly. All major products offer same-day or instant USDC redemption, which is the liquidity that institutional users actually need.
Regulatory Status
BENJI (FOBXX) is the only US-registered mutual fund in the group — a 1940 Act fund with SEC registration. It is regulated as a mutual fund. BUIDL, OUSG, USYC, and USTB are structured as private funds or exempt offerings — typically Cayman exempted companies or Delaware statutory trusts, exempt from Investment Company Act registration under Section 3(c)(7) (qualified purchaser exemption) or similar provisions.
In August 2026, the SEC issued a no-action letter permitting Franklin Templeton's registered funds to use tokenized FOBXX shares for collateral management — the regulatory clearance that enabled the BENJI/Bybit program. This is a meaningful precedent for the regulatory treatment of tokenized registered fund shares.
Risks
These products carry less credit risk than most crypto assets — the underlying US Treasuries are the lowest-credit-risk dollar-denominated instruments in the world. But they carry distinct risks that traditional money market fund investors do not face:
- Custodian risk. If the custodian holding the underlying Treasuries fails, the fund's assets may be subject to bankruptcy proceedings even if the SPV is properly structured.
- Smart contract risk. A bug in the token contract could affect transfer, redemption, or yield accrual mechanics.
- Redemption gate risk. In periods of market stress, platforms may impose redemption queues or gates. Check the offering documents for gate conditions.
- Regulatory risk. These products are built on regulatory interpretations that could change. BUIDL's exemption structure, BENJI's registered fund status, and the collateral no-action letters are all subject to reversal by a future administration or commission.
- Rate risk. Yield tracks short-term Treasury rates. If the Fed cuts rates significantly, yields compress. The principal value is stable (these are short-duration instruments) but yield falls.