What to know:
- Circle’s USYC hit $2.9B, now the largest tokenized U.S. Treasury fund, ahead of BlackRock’s $2.7B BUIDL.
- Tokenized Treasuries grew 107% YoY amid rising institutional demand for regulated on-chain yield.
- Tokenized funds are replacing stablecoins as compliant collateral, with more exchange and DeFi integration expected.
U.S. Treasuries tokenized have not only become one of crypto’s real-world asset segments but also a part of the fastest-growing ones; though, the market leaders have recently changed. Circle’s treasury-backed U.S. Yuan Certificate (USYC) has seen considerable growth from a market cap of about $600 million to nearly $3 billion last year.
BUIDL, which represents BlackRock’s tokenized U.S. Treasury product, had a market cap of $2.7 billion, the second biggest one before it turned out USYC had overtaken it to become no.1. The U.S. Treasuries tokenized market segment has been growing so fast that in this time span alone the size of it doubled more or less up to $15.2 billion, a record 107% YoY growth.
Why RWA market changed
Institutional investors constant quest for a reliable and profitable way of earning on-chain yield with short-duration US government debt backs the USYC token, making the asset a perfect fit for the institutional market.
While stablecoins offer a different set of benefits, unlike them, USYC represents an asset that is actually traded and issued through the regulated routes, Circle is also a transfer agent.
BUIDL, being the product of BlackRock launched alongside Securitize, still stays the only viable alternative product. It mainly leverages both Ethereum and EVM compatible networks. The $15.2 billion total market cap is based on data from rwa.xyz and DefiLlama so you understand better the trend: treasuries account for more than half of the tokenized RWAs.
Also Read: OSL and Circle Boost Institutional USDC Access With $200M Milestone
24/7 Regulated Collateral
Asset managers, exchanges, and fintechs benefit through the USYC token and a BUIDL token, as 24/7 collateral can be used in blockchain settlement. Such settlement takes place inside a regulated fund structure.
Investors enjoy exposure to treasuries even outside the hours of stock markets. At the same time, there is more freedom to engage in other investment opportunities outside trading hours, as the collateral that would otherwise lock-up the funds is now being released during non-standard trading hours.
Source: Investopedia
On the development side, besides being able to use the tokens as collateral in repo, lending, and derivatives protocols developers have also found them as being superior to unbacked stablecoins for purposes of collateral use.
Legal uncertainty over token-based deposits and funds seems to have been diminished by statements made by regulators in the U.S. EU, and Hong Kong, signaling a certain level of acceptance of those types of tokens.
Also Read: Trump Pushes CLARITY Act as Crypto Leaders Call for Regulation
Interoperability Is Next For Circle
What we saw happening in 2025-2026 on tokenization of RWA was driven by a search for return and improved clarity in fund systems. Circle and BlackRock are both planning to offer the tokens more widely in the form of the exchanges, custodians, and DeFi integrations.
Source: Juno Finance
The next significant development will be interoperability between fund providers. Besides that, increased secondary market liquidity as well as clarity on the rules for interaction of tokenized funds with bank regulations and CBDC pilot projects will need to happen.
Also Read: BlackRock Clients Buy $122M in Ethereum in 7-Month High
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