According to digital asset data tracker CoinGecko, tokenized treasuries in the United States experienced a significant growth of 641% in 2023, thanks to the participation of traditional finance companies. CoinGecko’s 2024 report titled “Rise of Real World Assets in Crypto” highlighted the progress made in the tokenization of real-world assets (RWA). The report revealed that tokenized treasuries increased from $114 million in January 2023 to $845 million by the end of the year, indicating a remarkable growth of 641% within a year for blockchain-based digital tokens representing U.S. Treasury securities.
Tokenized securities are digital tokens that are backed by RWAs such as stocks and bonds. For instance, the Ondo Short-Term US Government Bond Fund utilizes the OUSG token to represent ownership of a share of the fund and its yield.
CoinGecko emphasized that Franklin Templeton, an asset management firm, is currently the largest issuer of tokenized treasuries. The company has issued $332 million worth of tokens through its On-Chain U.S. Government Money Fund, giving it control over 38.6% of the market. Franklin Templeton is one of the 10 exchange-traded fund (ETF) issuers that launched a spot Bitcoin ETF in the U.S. in January. Furthermore, it has submitted an application to the U.S. Securities and Exchange Commission (SEC) for a Franklin Ethereum ETF on February 12, indicating its interest in launching an Ethereum ETF.
In addition to Franklin Templeton, other protocols that offer yield-bearing stablecoins backed by U.S. treasury bills are also gaining popularity. The report highlighted that Mountain Protocol’s USDM tokens have seen a significant increase in value, going from $26,000 to $154 million since their launch in September 2023.
Most tokenized U.S. treasuries are built on the Ethereum network, with 57.5% of the tokens residing on this platform. However, companies like Franklin Templeton and WisdomTree Prime have issued tokenized securities on Stellar, giving the network a 39% share of the market.
While tokenized treasuries experienced explosive growth in 2023, their growth rate slowed down in 2024. In January 2024, tokenized treasuries only grew by 1.9%, and as of February 1, they had a market capitalization of $861 million.
CoinGecko also highlighted the rise of commodity-backed tokens, which have reached a market capitalization of $1.1 billion as of February 1. Tether Gold (XAUT) and PAX Gold (PAXG) dominate the market, accounting for 83% of the market capitalization for tokenized precious metals.
Additionally, a new project has emerged, aiming to tokenize uranium and enable the redemption of the precious metal through digital tokens.
Overall, the tokenization of real-world assets and the growth of tokenized treasuries have demonstrated the increasing integration of blockchain technology in traditional finance sectors.