Tokenized United States treasuries could reach $3 billion by the end of 2024, showcasing the benefits of financial asset tokenization and its widespread adoption.
Tokenized treasuries would need to grow nearly two-fold to reach the $3 billion mark by the end of this year.
Reaching the $3 billion mark is possible due to the growing trend of decentralized autonomous organizations (DAOs) increasingly diversifying their holding into tokenized US treasuries, according to Tom Wan, a research strategist at 21.co.
Tokenized US treasuries will grow to $3 billion thanks to the product offerings of global giants like Securitize and BlackRock. The strategist wrote in a July 15 X post:
“With the two projects allocating to tokenized US treasury, we could be seeing the total market cap of tokenized US treasury increasing to $3B+ by the end of 2024.”
Tokenized US government securities have amassed over $1.6 billion in total assets under management (AUM), according to Dune data.
$3 billion boost to tokenized treasuries
BlackRock’s USD Institutional Digital Liquidity Fund, tickered BUIDL, became the largest tokenized treasury fund after it surpassed Franklin Templeton’s fund.
BUIDL became the largest tokenized fund in just six weeks, amassing over $375 million in market capitalization during that time. The fund is currently worth over $528 million and holds an over 28.8% market share.
BlackRock’s fund will add significant momentum for the inflows into tokenized treasuries, according to Wan. He said:
“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.
Tokenization: The next $16 trillion opportunity?
Tokenization could be the next multi-trillion market opportunity according to the world’s largest management consulting firm.
The global value of tokenized illiquid assets will grow to an estimated $16 trillion by 2030, according to a report released by the Global Financial Markets Association (GFMA) and Boston Consulting Group.
In more conservative estimates, analysts at Citigroup predicted that another $4 trillion to $5 trillion worth of tokenized digital securities will be minted by the year 2030, according to a 2023 report.
Large companies worldwide are recognizing the potential of tokenization. For example, Goldman Sachs is preparing to launch three new tokenization products later his year, citing an uptick in client interest.