With traditional finance companies on board, tokenized treasuries in the United States witnessed a growth spurt of 641% in 2023, according to digital asset data tracker CoinGecko.
On March 21, CoinGecko published its 2024 report titled “Rise of Real World Assets in Crypto,” highlighting progress in real-world assets (RWA) tokenization.
CoinGecko said that in 2023, tokenized treasuries went from $114 million in January 2023 to $845 million by the end of the year. This shows that blockchain-based digital tokens representing U.S. Treasury securities gained a 641% growth within a year.
Tokenized securities are digital tokens backed by RWAs like stocks and bonds. For example, the Ondo Short-Term US Government Bond Fund uses the OUSG token to represent ownership of a share of the fund and its yield.
CoinGecko highlighted that asset management firm Franklin Templeton is currently the largest issuer of tokenized treasuries. The company has issued $332 million worth of tokens with its On-Chain U.S. Government Money Fund, which means it controls 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. It is also in the race to launch an Ethereum ETF, as it submitted an application to the U.S. Securities and Exchange Commission (SEC) for a Franklin Ethereum ETF on Feb. 12.
Apart from Franklin Templeton, other protocols featuring yield-bearing stablecoins backed by U.S. treasury bills are also gaining in popularity. CoinGecko highlighted in the report that Mountain Protocol’s USDM tokens have increased from $26,000 to $154 million since its launch in September 2023.
Tokenized U.S. treasuries are mostly based on the Ethereum network. In the report, CoinGecko noted that 57.5% of the tokens are in Ethereum. Meanwhile, companies like Franklin Templeton and WisdomTree Prime issued tokenized securities on Stellar, giving the network 39% of the market.
Related: Tokenized government bonds free up liquidity in traditional financial systems
While tokenized treasuries blew up in 2023, growth slowed down in 2024. In January 2024, tokenized treasuries only grew by 1.9%. As of Feb. 1, they has a market capitalization of $861 million.
In addition to tokenized treasuries, CoinGecko also highlighted that commodity-backed tokens have already reached a market capitalization of $1.1 billion as of Feb. 1. Tether Gold (XAUT) and PAX Gold (PAXG) hold 83% market capitalization for tokenized precious metals.
A new project has also started tokenizing uranium, allowing the redemption of the precious metal with digital tokens.
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