The Total Value Locked (TVL) in tokenized U.S. Treasuries has officially crossed the $10 billion threshold, according to data from RWA.xyz. This milestone, representing a net growth of over $1 billion since the start of 2026, underscores accelerating institutional participation in real-world asset (RWA) tokenization.
Growth is concentrated in liquidity-oriented products such as Circle’s USYC, Ondo Finance’s USDY, and the BUIDL fund. KuCoin data places the current market capitalization near $10.8 billion. This expansion is driven by institutional demand for programmable yield alternatives and the development of permissioned pathways connecting traditional custody to on-chain settlement.
Tokenized Treasuries wrap short-duration government debt in on-chain representations, enabling features like peer-to-peer transferability and near-instant composability. This has led to their integration beyond simple buy-and-hold strategies into critical use cases such as on-chain collateral for settlements, margining, and liquidity backstops.
Regulatory treatment remains a key factor, with these instruments classified as securities, placing them within KYC/AML-gated environments. Major infrastructure developments are shaping adoption, including a December 2025 announcement from the Depository Trust and Clearing Corporation (DTCC) to launch a tokenization service for U.S. Treasuries on the Canton Network, with a minimum viable product targeted for the first half of 2026.
The sector has grown fiftyfold since 2024, bolstered by launches like BlackRock’s USD Institutional Digital Liquidity Fund, which now exceeds $1.2 billion in capitalization. This growth has persisted despite broader crypto market volatility and macroeconomic uncertainty, indicating a capital rotation toward yield-bearing, sovereign-backed digital assets.
