Tokenized Treasury Market Is Worth Over $600 Million: Binance Research

Despite being in the early innings of development, tokenization of real-world assets (RWA) has gained significant traction in recent years attracting users and large institutional players alike.

A new study suggests that RWAs have emerged as the 10th largest sector in DeFi based on protocols tracked by DeFi Llama after climbing from the 13th spot around a month back.

Binance Research’s latest edition stated that “the rise in the ranks of RWAs as a sector is a testament to the increasing adoption of RWA protocols.” Moreover, the newly unveiled stUSDT has been a major factor catalyzing the trend.

Real-World Assets

Currently, there are more than 41.3K RWA token holders on the Ethereum blockchain. The figure represents a 130% increase from the 17.9K recorded at the beginning of the year, according to data compiled by Binance Research.

Tokenized US Treasuries is yet another aspect that has gained prominence in the RWA sector in recent times. The term “US Treasury” pertains to the debt issued by the US government, which is known for its role as a benchmark for risk-free assets in traditional financial markets. As interest rates have been on the rise, the yields on these treasuries have gradually climbed, surpassing DeFi yields notably.

“Intuitively, assuming all else is equal, capital goes where yields are the most competitive – US Treasuries stand out here. Demonstrating the utility of RWAs, investors today can take advantage of real-world yields by investing in tokenized treasuries without leaving the blockchain.”

According to the report, the tokenized treasury market holds an approximate value of $603 million. This implies that investors are essentially lending that amount to the US government at nearly 4.2% APY.

$16 Trillion Market

A study conducted by the Boston Consulting Group predicted that tokenized assets are estimated to be a $16 trillion market by 2030. By the end of the decade, this projected growth would result in the tokenization of assets equivalent to 10% of the global GDP.

Such a scenario depicts a substantial rise from the $310 billion value recorded in 2022. The estimation takes into account both on-chain asset tokenization, which is particularly relevant to the blockchain industry, and traditional asset fractionalization, such as exchange-traded funds (ETFs) and real estate investment trusts.

Some experts believe that RWA’s adoption will be fueled by the emergence of Central Bank Digital Currencies (CBDCs), tokenized assets in gaming, and blockchain-based payments on social media. Others are of the opinion that “fractional ownership is the key proposition” for its adoption.