The market for tokenized US Treasurys is poised for significant growth, with projections indicating it could surpass $3 billion by the end of 2024. According to Tom Wan, a research strategist at 21.co, the rise in adoption of tokenized financial products and diversification by decentralized autonomous organizations (DAOs) into tokenized US Treasurys are major drivers behind this expected growth. This expansion highlights the revolutionary power of financial asset tokenization and its increasing uptake in the market.
Tokenized US Treasurys: The Key Drivers of Expansion
The growing diversification of holdings by DAOs into tokenized US Treasurys is a major factor driving this rise. Tom Wan noted this trend in a recent post on X, formerly known as Twitter, emphasizing the proactive actions of major global players like BlackRock and Securitize. Wan stated, “With the two projects allocating to tokenized US Treasurys, we could be seeing the total market cap of tokenized US Treasurys increasing to $3B+ by the end of 2024.”
According to data from blockchain analytics, tokenized US government securities have accumulated over $1.6 billion in total assets under management (AUM). This growth is a clear indication of the increasing interest and trust in tokenized financial products.
Impact of BlackRock’s Initiatives
News sources report that a significant portion of the market is driven by BlackRock’s USD Institutional Digital Liquidity Fund, ticker symbol BUIDL. This fund has become reportedly the largest tokenized treasury fund, surpassing Franklin Templeton’s fund. BUIDL achieved this status within six weeks, allegedly amassing over $375 million in market capitalization during that period. According to official reports, the fund now holds over $528 million, representing a 28.8% market share.
Wan believes that BlackRock’s proactive approach in this area will greatly increase the inflows into tokenized Treasurys, further spurring market growth. “As the strategy laid out by Securitize and BlackRock, they intend to provide diversification for the crypto ecosystem to access risk-free US treasury yield without needing to leave the blockchain ecosystem,” Wan added.
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Major global players like Securitize and BlackRock are apparently leading the charge, offering tokenized treasury products that are attracting substantial interest. This surge in interest is a testament to the trust and confidence that investors have in these innovative financial products.
Tokenized US Treasurys: Market Potential and Long-term Projections
Official reports claim that Tokenization has wider ramifications than just short-term financial advantages; it has the potential to be a multitrillion-dollar business. The world’s largest management consulting firm predicts that tokenization could become a multi-trillion-dollar market. A report by the Global Financial Markets Association (GFMA) and Boston Consulting Group estimates the global value of tokenized illiquid assets will reach $16 trillion by 2030. Even more conservative estimates from Citigroup suggest that $4 trillion to $5 trillion worth of tokenized digital securities could be minted by 2030.
Recognizing this potential, major companies are making significant moves in the tokenization space. Goldman Sachs, for instance, reportedly plans to launch three new tokenization products later this year, driven by growing client interest. Observers note that some protocols have played a significant role in driving this growth, particularly in terms of active users. Digital carbon market platforms like Toucan and KlimaDAO, as well as the real estate tokenization protocol Propy, have experienced substantial user growth.
Crypto Expert reviews that it is worth noting that both public and private blockchains are witnessing the inclusion of various assets. Some notable examples include Franklin Templeton’s U.S. Government Money Fund expanding from Stellar to Polygon, Backed Finance launching a tokenized short-term U.S. treasury bond exchange-traded fund (ETF), and UBS Asset Management deploying a tokenized money market fund (MMF) on the Ethereum blockchain.
A Quick Wrap-Up
The tokenized US Treasurys market is expected to reach $3 billion by 2024, driven by growing adoption and strategic investments by major players like BlackRock and Securitize. Tokenization has transformative potential in finance, and tokenized assets will play a crucial role in shaping the future of finance. Companies like BlackRock and Securitize are proactively embracing tokenized assets, which are gaining acceptance.
This sector is projected to experience significant growth, making tokenized US Treasurys a key component of the global financial landscape, offering new opportunities for investors and enhancing market efficiency and transparency. Keep following The BIT Journal and get latest updates on crypto news and more.
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