What Are Tokenized Treasuries? Structure and Eligibility Explained

Tokenized US Treasuries hold $15.20 billion in distributed value across 76 products as of May 4, 2026, per RWA.xyz, up from roughly $1.7 billion in early 2024. Circle, BlackRock, Ondo Finance, Franklin Templeton, and Centrifuge are the issuers driving the category. The pitch is uniform: Treasury exposure with 24/7 blockchain settlement. The structure is not. Whether you can buy one, how you redeem, and which IRS form arrives depend on which statutory wrapper the product was built under.

Key Takeaways

• The tokenized US Treasury market held $15.20 billion in distributed value across 76 products with 58,658 holders and a 7-day APY of 3.36% as of May 4, 2026, per RWA.xyz.
• The top five issuers by AUM were Circle USYC ($2,907,935,943), BlackRock BUIDL ($2,582,490,728), Ondo USDY ($2,140,124,145), Franklin Templeton BENJI ($2,052,056,915), and Centrifuge JTRSY ($1,240,666,207), per RWA.xyz.
• Two structural categories define the market: tokenized regulated fund shares (BUIDL, BENJI, USTB) where blockchain is the system of record for fund shares, and offshore wrapper debt tokens (USYC, USDY, TBILL) issued by Cayman/BVI vehicles holding T-bills, with eligibility and redemption mechanics that differ materially.
• Most products restrict access to Qualified Purchasers under the 1940 Act (BUIDL, USTB) or non-US persons under Reg S of the Securities Act of 1933 (USYC, USDY); Franklin BENJI is the lone retail-eligible registered money market fund.
• BUIDL launched in March 2024 and surpassed $1 billion in assets under management as of March 13, 2025; it deploys across Ethereum, Aptos, Arbitrum, Avalanche, Optimism, and Polygon, with Bank of New York Mellon as cash and securities custodian.
• The 7-day APY across the category was 3.36% as of May 4, 2026, per RWA.xyz.
• Form 1099-DA reporting applies to digital asset transactions starting with the 2025 tax year; under Rev. Proc. 2024-28, effective 1 January 2025, investors must track cost basis at the wallet or account level.

What Are Tokenized Treasuries?

A tokenized treasury is a blockchain-issued token that provides US Treasury bill exposure through one of two structures: a share in a regulated fund recorded on a public blockchain as the official system of record (BlackRock BUIDL, Franklin BENJI, Superstate USTB), or a debt token issued by an offshore vehicle that holds T-bills and is redeemable into a stablecoin (Circle USYC, Ondo USDY, OpenEden TBILL). The common feature across both structures is that settlement runs on blockchain rails: the fund provides 24/7/365 peer-to-peer transfers and near real-time settlement, which differ from traditional money market fund windows.

BENJI launched in 2021 as the first U.S.-registered mutual fund to use a public blockchain as its official system of record for processing transactions and recording share ownership.

How Big Is the Tokenized Treasury Market?

The tokenized US Treasury market held $15.20 billion in distributed value across 76 products with 58,658 holders and a 7-day APY of 3.36% as of May 4, 2026, per RWA.xyz. The top seven products by AUM cover the two structural categories in both directions.

Source: RWA.xyz Tokenized U.S. Treasuries dashboard

The market operates across multiple blockchain networks, including Ethereum, Solana, Polygon, Arbitrum, and others. Headline AUM flattens a critical distinction: regulated fund shares versus offshore debt tokens carry different redemption, bankruptcy, and tax mechanics.

Two Structures: Tokenized Fund Shares vs Offshore Wrappers

Two structurally distinct models exist in the tokenized treasury market. In the tokenized regulated fund model, blockchain-issued tokens ARE shares of an SEC-regulated fund: BUIDL provides qualified investors access to US dollar yields on-chain, with Securitize as tokenization provider. In the offshore wrapper model, a Cayman Islands or BVI vehicle holds US Treasury bills and issues a debt token redeemable into USDC: USYC is the on-chain representation of the Hashnote International Short Duration Yield fund, licensed by the Bermuda Monetary Authority through Circle International Bermuda Limited as token administrator.

Source: BlackRock / Securitize press release; Circle USYC product page; OpenEden TBILL documentation

Key finding: Two structurally distinct models define the tokenized treasury market. Tokenized regulated fund shares (BUIDL, BENJI, USTB) represent fund ownership on a blockchain system of record with regulated fund protections. Offshore wrapper debt tokens (USYC, USDY, TBILL) are claims against Cayman or BVI vehicles holding T-bills, redeemable into USDC, with SIPC not applicable to either structure.

The structural split echoes the SEC and CFTC crypto regulation lineage that produced spot Bitcoin ETF approvals: institutional product design follows the available regulatory wrapper.

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BlackRock BUIDL: The Largest Tokenized Regulated Fund

BUIDL, tokenized by Securitize and launched in March 2024, surpassed $1 billion in assets under management as of March 13, 2025; it is BlackRock’s first tokenized fund to be issued on a public blockchain. RWA.xyz reports BUIDL AUM at $2,582,490,728 as of May 4, 2026, ranking it the second-largest tokenized treasury product globally. The fund provides qualified investors access to US dollar yields on-chain with flexible custody, daily dividend payouts, and near real-time 24/7/365 peer-to-peer transfers.

Key structural details per the BlackRock and Securitize joint disclosure:

• BUIDL initially launched on Ethereum and expanded to 6 networks, including Aptos, Arbitrum, Avalanche, Optimism, and Polygon, with cross-chain interoperability enabled by Wormhole.
• Bank of New York Mellon holds the role of cash and securities custodian for the fund; BitGo, Copper, Fireblocks, and Anchorage provide custody services for BUIDL subscribers.
• The fund enables treasury management, stablecoin backing, DeFi access, and collateral for trading, per the BlackRock and Securitize release.
• BUIDL has been listed as collateral on derivatives exchanges, including Binance and now deploys on the BNB Chain; DAO treasuries, including Maker and Arbitrum, have allocated portions of their reserve to tokenized treasury exposure via BUIDL or wrapper products like Ondo’s OUSG.

BUIDL is the clearest product bridging a 1940 Act structure into native blockchain settlement at scale.

Franklin BENJI: The Retail-Eligible 1940 Act Path

BENJI launched in 2021 as the first U.S.-registered mutual fund to use a public blockchain as its official system of record for processing transactions and recording share ownership. Franklin Templeton BENJI holds $2,052,056,915 in AUM as of May 4, 2026, per RWA.xyz, ranking it the fourth-largest tokenized treasury product. BENJI tokens represent shares in the Franklin OnChain U.S. Government Money Fund (FOBXX), a money market fund investing in U.S. government obligations, operating on the Stellar network.

Key structural details from the Stellar Development Foundation and Franklin Templeton joint release:

• BENJI delivers daily on-chain dividend distribution that runs 365 days a year, including weekends and holidays, with intraday yield accrued by the second when tokens are transferred.
• BENJI offers peer-to-peer transferability of shares with 24/7 market access and near-instant settlement.
• Franklin Templeton has also launched tokenized funds on Stellar in Luxembourg in 2024 and Singapore in 2025.

BENJI’s status as a registered money market fund makes it the lone retail-eligible entry point in the category, and its five-year run gives the regulated-fund-on-blockchain model a longer track record than any wrapper.

Circle USYC and the Offshore Wrapper Model

USYC is the on-chain representation of the Hashnote International Short Duration fund, which invests in US Treasury bills and reverse repurchase agreements backed by short-term US government securities. Circle USYC holds $2,907,935,943 in AUM as of May 4, 2026, per RWA.xyz, ranking it the single largest tokenized treasury product globally. Shares are only available to non-US Persons, as defined under the Securities Act of 1933; the Bermuda Monetary Authority licenses Circle International Bermuda Limited as token administrator for the Cayman Islands-registered fund.

Key features from Circle’s official USYC product page:

• USYC yield accrues automatically through a rising token price, with no staking, claiming, or added operational complexity.
• USYC is available on Base, Canton, Ethereum, NEAR, and Solana as ERC-20 and SPL-22 tokens, with a subscription minimum of $100,000.
• Settlement provides near-instant redemptions into USDC below capacity thresholds, with 24/7 access to capital free from banking delays, cut-off times, and trading windows.
• A single API connects USYC and USDC, enabling efficient movement between the two instruments.

The Canton deployment lets USYC holders move collateral without public disclosure. The wrapper expresses non-bank settlement: redeemable into stablecoin, outside the SIPC backstop.

Ondo OUSG and USDY: Two Products, Two Audiences

Ondo Finance runs two tokenized treasury products covering the structural split: OUSG, which accumulated over $1.1 billion in TVL as of late 2025 and primarily holds short-term U.S. Treasuries through BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL), making it a passthrough to BUIDL with tokenization features layered on top; and USDY, Ondo’s separate offshore wrapper product for non-US investors, backed by short-term U.S. Treasuries and bank deposits.

Per RWA.xyz as of May 4, 2026, OUSG holds $682,373,912 in AUM while USDY holds $2,140,124,145, making USDY the third-largest tokenized treasury product globally.

Key structural details from Ondo Finance’s product documentation:

• OUSG provides instant mint and redemption with USDC, smart-contract-based custody, and 24/7 transferability; it deploys across Ethereum, Solana, Polygon zkEVM, Mantle, and Arbitrum.
• OUSG is restricted to qualified purchasers and requires KYC verification.
• Ondo Finance was founded by Nathan Allman and Pinku Surana, both formerly of Goldman Sachs Digital Assets.

Superstate USTB and the Wall Street Bridge

Ethereum holds the largest allocation of Superstate USTB at 80.80% of fund shares, with additional support on Solana, Plume, and book-entry formats; the fund manages $997.78 million in assets per Superstate’s product page; Superstate Advisers LLC is a registered investment adviser per its own disclosure. RWA.xyz records USTB AUM at $814,129,083 as of May 4, 2026.

Key features from Superstate’s official product documentation:

• Eligible investors are Qualified Purchasers in supported jurisdictions.
• All investors are subject to a 0.15% management fee with rebate provisions for larger holders.
• Investors can mint or redeem shares in a single on-chain Ethereum transaction with liquidity each market day; interest is calculated and accrues in real-time upon subscription, and redemptions can be priced in real time.

Superstate has partnered with Invesco to white-label and manage the USTB fund; Robert Leshner, founder of Superstate and previously the founder of Compound Finance, described the partnership as the first instance of a major traditional asset manager taking direct operational responsibility for a tokenized treasury product. Invesco currently manages over $1.7 trillion in assets globally; the USTB partnership represents a small absolute allocation but a structurally important signal that traditional asset management firms are willing to put their brand on blockchain-issued fund shares.

Leshner’s path from DeFi origins to investment adviser captures the migration that the wider category is making.

OpenEden TBILL and the BVI Professional Investor Path

TBILL tokens from OpenEden are backed 1:1 by short-dated US T-Bills and a small portion of US Dollar reserve; the tokens are only available to Professional Investors as defined under the BVI Securities and Investment Business Act. OpenEden TBILL holds $123,802,146 in AUM as of May 4, 2026, per RWA.xyz.

Key structural details from OpenEden’s official TBILL documentation:

• The underlying US T-Bills are managed by BNY Investment Management and custodied by BNY.
• The first deposit must be 100,000 USDC or more, while subsequent deposits must be 1 USDC or more.
• Redemption requests are placed in a redemption queue to be typically processed on the next 1 U.S. business day; there is a 5 bps transaction fee charged on redemptions and a 30 bps annualized total expense ratio.

TBILL’s BVI Professional Investor requirement places it in a third statutory regime distinct from the Qualified Purchaser and Reg S frameworks governing the rest of the category.

Who Can Actually Buy Tokenized Treasuries?

Eligibility across the major tokenized treasury products spans three statutory regimes plus one retail exception: Qualified Purchaser under the 1940 Act governs BUIDL and USTB; Professional Investor under the BVI Securities and Investment Business Act governs TBILL; non-US persons under Reg S of the Securities Act of 1933 governs USYC and USDY; and retail-eligible access under 1940 Act money market fund rules applies to BENJI as the sole exception.

The eligibility matrix by product:

Source: BlackRock / Securitize press release; Franklin Templeton / Stellar press release; Circle USYC product page; Superstate USTB product page; OpenEden TBILL documentation

Why it matters: Eligibility splits the category along three statutory regimes (Qualified Purchaser, BVI Professional Investor, and Reg S non-US person) with one retail exception. Most readers asking what tokenized treasuries are assume a TreasuryDirect-style retail product. The matrix above shows the opposite: institutional access dominates the category, and the retail path runs through a single registered money market fund.

The EU’s MiCA regulatory regime adds a parallel eligibility cut for European-domiciled investors routing into Reg S offshore wrappers, a surface most competing explainers omit when they describe retail investor access patterns for tokenized funds.

Settlement and Redemption Mechanics

Mint and redemption mechanics vary by product: BUIDL offers daily NAV with USDC redemption via Securitize ATS and near real-time 24/7/365 peer-to-peer transfers; BENJI provides daily on-chain dividend distribution running 365 days a year with intraday yield accrued by the second on transfer; USYC provides near-instant USDC redemption below capacity thresholds; USTB allows investors to mint or redeem shares in a single on-chain Ethereum transaction with liquidity each market day; and TBILL processes redemptions typically on the next 1 U.S. business day.

Source: BlackRock / Securitize press release; Franklin Templeton / Stellar press release; Circle USYC product page; Superstate USTB product page; OpenEden TBILL documentation

The settlement gap with traditional money market funds turns a Treasury bill from a return-on-cash position into programmable collateral that can move with the trade it is hedging, a behaviour visible in country-by-country crypto adoption data where wholesale users sit outside US-domiciled fund windows.

Use Cases: Why Institutions Want T-bills On-Chain

Treasury management, stablecoin backing, DeFi access, and collateral for trading are the four primary use cases per BlackRock’s BUIDL disclosure; the fund enables each as listed capabilities for qualified investors. The DeFi market data shows the scale of on-chain capital that tokenized treasuries now intersect.

Key use cases with source attribution:

• Stablecoin backing: Circle’s acquisition of Hashnote (which manages USYC) tightens the integration loop between the USDC reserve and tokenized treasury exposure. BUIDL also targets stablecoin backing as an explicit use case.
• Collateral on derivatives venues: BUIDL has been listed as collateral on Binance and deployed on the BNB Chain; USYC operates on Canton Network with privacy-preserving collateral mobility per the Canton Network and Digital Asset announcement.
• DAO treasury yield: DAO treasuries, including Maker and Arbitrum, have allocated portions of their reserve to tokenized treasury exposure via BUIDL or wrapper products like Ondo’s OUSG, which holds BUIDL as its underlying.
• Institutional 24/7 cash management: BUIDL provides near real-time 24/7/365 peer-to-peer transfers; BENJI delivers daily on-chain dividend distribution running 365 days a year, including weekends and holidays, both contrasting with the weekday-only windows of traditional fund vehicles.

Risks of Tokenized Treasuries

The underlying T-bills carry standard short-duration government risk; tokenization-specific risks operate at the wrapper layer.

Specific risk surfaces by category:

• Smart contract risk: Token contract bugs and oracle dependencies apply to both wrapper models.
• Offshore wrapper opacity: USYC operates as the on-chain representation of a Cayman Islands-registered fund administered by Circle International Bermuda Limited; TBILL is a BVI Professional Investor product issued by an offshore vehicle outside the U.S. registered fund framework. SIPC does not apply to either structure, and bankruptcy treatment differs from regulated fund structures in the U.S.
• Counterparty and custody risk: Bank of New York Mellon holds cash and securities custody for BUIDL and manages the underlying T-Bills for OpenEden TBILL; BUIDL subscribers also depend on Anchorage, BitGo, Copper, or Fireblocks for digital asset custody, creating a transfer agent, custodian, and smart-contract triad as the dependency chain.
• Eligibility error: BUIDL and USTB restrict access to qualified investors, enforced through KYC; USYC and USDY restrict access to non-US persons under Reg S, enforced through a geo-gating compliance mechanism on Circle’s product page.
• Regulatory ambiguity: Offshore wrapper debt tokens restrict access to non-U.S. persons as defined under the Securities Act of 1933. The Reg S framework does not fully resolve secondary-market transfer questions for tokenized debt instruments, a jurisdictional gap that sits between CFTC and SEC authority.

How Tokenized Treasuries Are Taxed

Tax treatment for tokenized treasuries depends on the wrapper structure: regulated fund shares (BUIDL, BENJI, USTB) typically distribute dividends or pass-through interest reported on Form 1099-DIV or Form 1099-INT, with the federal-taxable, state-tax-exempt treatment applicable to US government securities potentially preserved depending on the wrapper; offshore wrapper debt tokens (USYC, USDY, TBILL) accrete yield into redemption value, and Form 1099-DA reporting applies to digital asset transactions starting with the 2025 tax year.

Tax form implications by wrapper type, per IRS guidance:

• Two wrapper types determine yield characterization: fund shares distribute dividends or pass-through interest as ordinary income; direct debt tokens accrete yield into redemption value, generating a disposal event taxable under digital asset rules.
• A custodial platform that distributes interest income may issue a Form 1099-INT or Form 1099-DIV for that income, while also issuing a Form 1099-DA for any token disposal events.
• Under Rev. Proc. 2024-28, effective 1 January 2025, investors must track cost basis at the wallet or account level, not pooled across all holdings.

Treating a tokenized treasury like a TreasuryDirect entry triggers a Form 1099-DA disposal event plus IRS wallet-level basis tracking.

Frequently Asked Questions (FAQs)

Conclusion

The tokenized US Treasury market holds $15.20 billion in distributed value across 76 products as of May 4, 2026, per RWA.xyz, a category that grew from roughly $1.7 billion in early 2024.

Two structures define the category. Regulated fund shares (BUIDL, BENJI, USTB) place blockchain as the system of record for an SEC-regulated fund. Offshore wrappers (USYC, USDY, TBILL) issue debt tokens against Cayman/BVI vehicles, redeemable into stablecoin.

The beneficiaries are institutional treasurers and DAO operators seeking 24/7 cash management with yield, accredited investors seeking on-chain settlement of short-duration government exposure, and non-US wholesale participants with access to USYC and USDY. The Invesco partnership with Superstate shows the next signal: traditional asset managers white-labeling tokenized fund infrastructure rather than building it independently. Retail expansion via regulated money market vehicles in the BENJI model is the bigger structural shift to watch in the coming quarters.