According to Tom Wan, an analyst at digital asset company 21.co, the total market value of tokenized US government bonds could reach $3 billion by the end of 2024 as the adoption of decentralized finance (DeFi) projects and decentralized autonomous organizations (DAOs) for real-world assets (RWAs) continues to rise.
Wan believes that this trend is driven by the demand for asset diversification and stability from DeFi projects. He points out notable examples such as the Ethereum layer-two network Arbitrum and the lending protocol MakerDAO, which have allocated $27 million and $1 billion worth of assets respectively to these interest-bearing products.
Data from Dune shows that the “BlackRock USD Institutional Digital Liquidity Fund” (BUIDL), issued by BlackRock in March this year, has become the largest tokenized government bond fund with a market value of nearly $520 million, surpassing Franklin Templeton’s BENJI fund (with a market value of approximately $400 million).
Wan states that financial companies like BlackRock and Securitize are developing strategies to provide diversified options for the cryptocurrency ecosystem, enabling risk-free returns from US government bonds without leaving the blockchain ecosystem. He believes that this trend will continue in the long term, saying, “We may see the total market value of tokenized US government bonds increase to over $3 billion by the end of 2024.”
According to data compiled by 21.co, the total assets under management of tokenized government securities currently amount to approximately $1.7 billion. There are a total of 17 tokenized government securities products issued, including the aforementioned financial companies as well as Ondo Finance, Backed Finance, Matrixdock, Maple Finance, and Swarm.
Related articles: “Mid-term and Short-term RWA: A Discussion on Web3 Government Bond Business” and “Moody’s: Tokenization Growth Depends on the Development of Blockchain-driven Secondary Markets”.
