Tokenized US Treasuries Hit $3 Billion Milestone

by

As a researcher who has been closely following the evolution of tokenized assets since their inception, I must say that 2024 has been nothing short of extraordinary for this sector. The surge in the total market capitalization by 32% and the breakthrough of $3 billion by tokenized US Treasuries are testament to the growing maturity and acceptance of this technology.

According to RWA.xyz, a prominent data and analytics provider specializing in tokenized real-world assets, tokenized US Treasuries have shattered a significant threshold, exceeding a total worth of $3 billion.

90 days ago, this market surpassed the $2 billion mark for the first time. Its recent surge can be attributed to Hashnote’s success with USYC. At the start of 2024, the combined value of tokenized treasuries was barely over $750 million, indicating a staggering 300% increase compared to the previous year.

Tokenized Assets Surge 32% in 2024, US Treasuries Break $3B Barrier

As reported by RWA.xyz’s analytics, the year 2024 marked a significant milestone for tokenized assets. The overall market capitalization of these tokens saw a 32% rise. Remarkably, tokenized US Treasuries crossed a major threshold, reaching over $3 billion in total worth within just 90 days.

Leaving out stablecoins, various types of tokenized investments have been growing swiftly. For instance, tokenized U.S. Treasury bonds have increased by 179%, private credit has risen by 40%, and commodities have seen a growth of 5%.

As a researcher, I’ve noticed an intriguing surge in market value alongside the expansion of regulatory frameworks in regions like the United States, Middle East, and Hong Kong. This growth has sparked a flurry of innovation among traditional financial institutions, leading to unparalleled institutional curiosity about this space. Notably, Chainlink has recently partnered with Coinbase’s Project Diamond, paving the way for cross-chain interoperability with tokenized assets.

BREAKING: Tokenized US Treasuries Surpasses $3B Total Value

In just under three months following its $2 billion milestone, the market for tokenized government bonds has experienced a surge in value topping an additional $1 billion. This growth can be attributed largely to the thriving performance of Hashnote’s USYC offering.

At the start of 2024, it was less than $750M, bringing YoY growth to 300%.

— RWA.xyz (@RWA_xyz) December 18, 2024

 

Since the start of 2024, new synthetic stablecoins have emerged, backed by non-cash equivalents like gold or basis trades. This has raised concerns about whether the term “stablecoin” is too broad. Stablecoin transactions have surpassed PayPal’s annual volume and are approaching Visa levels. However, a Visa report revealed that up to 90% of stablecoin transactions were “inorganic,” raising doubts about their real-world utility.

That conclusion is being further examined in studies by researchers including TAC members.

Lower Interest Rates to Reshape Tokenized Asset Market in Late 2024

2024, as reported by RWA, has seen a surge of regulatory actions, particularly focusing on digital currencies known as stablecoins. Regulatory structures are being established in Asian regions, whereas the MiCA regulations in the European Union have just completed drafting their policy proposals.

In the U.S., there’s a significant push for regulating stablecoins due to their recent market growth exceeding $200 billion. This surge is primarily fueled by crypto trading and non-crypto applications such as payments and remittances. On the other hand, the regulation of tokenized U.S. Treasuries and real assets is still in its experimental phase, with regulatory hearings and sandboxes being conducted to explore potential regulations.

By the end of Q4 2024, we can expect a clearer understanding of how regulations impact the growth and framework of the stablecoin market. This insight may also reshape global perspectives on tokenization. Consequently, fresh guidelines could be established for regulating tokenized asset categories.

Tokenized US Government Debt Outperforms in 2024, Up 179%

Starting from January 2024, US short-term government debt has been leading the pack in the digital financial markets. Notably, the total value of all related products has surged by a substantial 179%. These impressive returns can be partly attributed to the elevated interest rates that have persisted post-COVID.

In contrast, as it’s anticipated that the Federal Reserve will shift its stance and interest rates are expected to decrease, investors might reconsider their investment portfolios. RWA analysts have pointed out potential new chances for tokenized U.S. Treasuries. These markets could potentially thrive with lower rates, putting the strength of higher-yield products to the test.

Over the past few years, the primary goal for companies issuing tokenized assets has been to convert traditional financial products into a digital form. Now that most of the essential infrastructure is established, these companies can explore the distinct advantages that tokenization offers. These benefits encompass uninterrupted trading around the clock and throughout the year, cross-collateralization for enhanced trading margin, and asset depositories that are naturally compatible and interoperable.

Looking ahead to the last three months of 2024, we’ll likely see ongoing investigation into the unique advantages that tokenization offers for revamping financial markets.

Read More

2024-12-18 21:18