21co analyst: Tokenized U.S. Treasury debt will reach $3 billion by the end of the year

‍Source: cryptoslate

Compiled by: Blockchain Knight

21co analyst Tom Wan believes that as the adoption rate of DeFi projects and decentralized autonomous organizations (DAO) continues to rise, by the end of 2024, tokenized U.S. Treasury bonds will reach $3 billion.

Wan believes that this trend is driven by the need for diversification and stability, especially as high interest rates make these assets more attractive.

Currently, there are more than 15 tokenized U.S. Treasury bond products on the Ethereum Virtual Machine (EVM) chain, with nearly $2 billion in assets under management.

Wan said: "DeFi projects are diversifying treasury bonds and incorporating them into tokenized U.S. Treasury bonds and stablecoins. This marks the transformation of the Crypto asset ecosystem towards real world assets (RWA)."

Famous examples Including Arbitrum and Maker DAO, which allocated $27 million and $1 billion respectively to these profitable products.

Spurred by financial giants like BlackRock and Securitize, these investments are part of a wider strategy to deliver risk-free returns. Of course, the premise is not to exit the blockchain ecosystem.

BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL) recently became the largest tokenized Treasury fund, surpassing Franklin Templeton’s BENJI fund.

Since its launch at the beginning of the year, BUIDL’s market capitalization has surged to nearly $500 million, reflecting growing demand for these assets.

The tokenized U.S. Treasury market has experienced explosive growth, with over $2 billion in assets tokenized on blockchains such as Ethereum, Polygon, and Solana.

Wan said this growth is expected to continue, predicting that the market value of tokenized U.S. Treasury bonds may exceed $3 billion by the end of 2024.

The integration of tokenized U.S. Treasury bonds and DeFi Treasury bonds represents a major development in the integration of traditional finance and blockchain technology. As more DAOs and DeFi projects adopt these products, the industry is poised to experience significant growth, attracting investors seeking reliable returns in the volatile Crypto asset market.

This trend highlights the potential of real-world asset tokenization to change the financial landscape, providing higher liquidity, faster transaction speeds, and lower fees.

As major financial institutions are exploring blockchain technology, the adoption of tokenized assets will surely reshape the future of the financial industry.

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