Demand for Tokenized Treasury Bonds Soars as Crypto Investors Chase TradFi Yield
Demand for tokenized versions of U.S. Treasury bonds is soaring as rising yields in traditional financial markets attract fresh capital from crypto investors. The combined market capitalization of tokenized money market funds nears $500 million, and has quadrupled in size this year, according to data compiled by CoinDesk. Money market funds are traditional investment products that hold short-term government securities.
The high yields of government bonds have also captivated digital asset investors discouraged by low lending rates and last year’s bankruptcies. Hence, a slew of platforms have come up with a way to offer access to them on the blockchain in the form of a token. The first and largest offering, investment giant Franklin Templeton’s Franklin OnChain U.S. Government Money Fund (FOBXX) – which gives a BENJI token on the Stellar blockchain representing one share – grew to $276 million in assets as of the end of April. This is almost triple the deposits in early January represented by the BENJI token supply, blockchain data shows. New challengers are quickly catching up in market share. Ondo Finance’s OUSG and Matrixdock’s SBTB tokenized products.
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