Tokenized Treasuries Surge 125% & The Institutional Race to Bank the Blockchain
The tokenization of real-world assets (RWAs) is rapidly gaining momentum, with the market nearing a significant milestone. On January 9th, distributed RWAs reached $19.72 billion, the closest the market has come to the $20 billion threshold. This growth is largely fueled by institutional interest and the increasing adoption of tokenized US Treasuries. However, this figure only represents assets that are freely transferable on-chain. A further $19.78 billion exists as “represented” assets – used for recordkeeping but not open to trading – bringing the total RWA landscape to nearly $40 billion. This article dives deep into the current state of tokenized RWAs, analyzing the key drivers, emerging trends, and potential future growth.
The Expanding RWA Landscape: A $40 Billion Market
The distributed RWA market is currently segmented into three primary areas. US Treasuries and money market funds dominate, accounting for a substantial $8.86 billion in on-chain collateral. Tokenized commodities, led by gold, hold a significant position near $4 billion. The remaining portion, encompassing institutional funds ($2.84 billion), distributed private credit tokens ($2.32 billion), tokenized equities ($801 million), and bonds ($880 million), represents the cutting edge of innovation, though issuer concentration remains a key challenge.
Stablecoins, with a market capitalization of $307.6 billion, dwarf the entire RWA stack and function as the essential liquidity layer that tokenized assets plug into. Their role is critical for facilitating seamless trading and settlement.
Treasuries Anchor the Stack: A 125% Growth Story
Over the past year, the RWA market has experienced transformative growth. Tokenized US Treasuries have roughly doubled, increasing from an estimated $3.95 billion in January 2025 to $8.86 billion by January 2026 – a remarkable 125% increase. This surge is driven by several factors, including the search for yield in a low-interest-rate environment and the efficiency gains offered by blockchain technology.
BlackRock's BUIDL fund has been a key player, crossing $2 billion in assets under management just one year after launch and distributing $100 million in dividends as of December 2025. Binance accepted BUIDL as collateral in November, further validating its utility. Ethena's USDtb stablecoin now backs 90% of its reserves with BUIDL tokens, demonstrating growing confidence in tokenized Treasuries as a stable and reliable asset.
JPMorgan launched its own tokenized money market fund, MONY, on Ethereum in December, with a $100 million seed investment. This trend highlights a clear pattern: institutions are increasingly treating tokenized Treasuries as programmable cash. Smart contracts automate interest payments, redemptions happen 24/7, and tokens move peer-to-peer without intermediaries. While still microscopic compared to the $28 trillion total outstanding US Treasuries, the infrastructure is scaling faster than adoption.
Institutional Funds Deliver Exponential Growth
Institutional alternative funds have seen even more dramatic growth, increasing from roughly $350 million to $2.84 billion – a staggering 714% increase. However, the market is currently dominated by a few key players. Centrifuge holds 34.29% market share, while Securitize controls 31.02%. This concentration means that partnership decisions by these tokenization providers significantly impact the entire category.
These funds bring private equity, credit, and structured products on-chain, leveraging familiar regulatory frameworks. Tokenization reduces friction in secondary trading and allows for fractional ownership, while yields remain attractive, ranging from 8% to 12%. On-chain settlement transparency also appeals to institutional compliance teams.
Liquidity Challenges in Institutional Funds
Despite the growth, liquidity remains a key challenge. Most secondary markets rely on redemption mechanisms controlled by fund managers rather than open order books. A 2025 academic analysis found that tokenized assets exhibit low trading volumes despite growing market caps. Until more venues offer compliant secondary trading, institutional funds will likely scale through issuance rather than true market-making.
Commodities & Equities: Emerging Opportunities
Tokenized commodities have grown from approximately $1.06 billion to nearly $4 billion, driven almost entirely by gold. PAXG and XAUT account for over 80% of commodity activity, as demand spiked 227% alongside record-high precious metal prices. This demonstrates the appeal of tokenization for traditionally illiquid assets.
Tokenized public stocks reached $801.36 million, up from roughly $250 million, representing a 218% gain. Ondo Finance controls 51.6% by value. Monthly transfer volume hit $2.66 billion despite the modest market cap, indicating high turnover. However, active addresses fell 26% over 30 days, suggesting participation is concentrating among fewer, more active traders.
Corporate bonds total $193.31 million with 14,300 holders. Cashlink controls 62.49%, JPMorgan holds 25.86%. Non-U.S. government debt stands at $686.66 million, with Spiko accounting for 80.72%. These deployments are largely proof-of-concept, allowing institutions to test infrastructure before committing larger capital pools.
Ethereum Dominates, But Multichain Strategies Accelerate
Ethereum currently holds $12.6 billion, equivalent to 64.51% of the distributed RWA market. BNB Chain accounts for $2.02 billion (10.37%), Solana $924.59 million (4.75%), Stellar $829.48 million (4.26%), and Arbitrum $745.92 million (3.83%).
Stellar has shown the fastest growth over the past 30 days (28%), followed by Solana (16.56%) and BNB Chain (12.11%). Ethereum’s dominance reflects its first-mover advantage and institutional familiarity. BlackRock launched BUIDL on Ethereum before expanding to seven other blockchains.
Nevertheless, multichain strategies are accelerating. Nearly 70% of BUIDL's assets now sit outside Ethereum, deployed where users and liquidity congregate. Interoperability providers like Wormhole enable seamless cross-chain transfers, which is crucial as liquidity fragments across networks.
Private Credit: Two Measurements, One Market
Private credit illustrates the methodological shift implemented by RWA.xyz in 2025. The platform now distinguishes between “distributed” assets (tokens that circulate on-chain) and “represented” assets (blockchain as a recordkeeping layer without open transfer). This distinction is critical for understanding the true scale of the market.
Distributed private credit represents $2.32 billion in tradable loan participations. The nearly $20 billion in active loans represents the underlying lending activity tracked on-chain but not freely transferable. The amount in active loans grew from an estimated $9.88 billion in January 2025, representing a 100% gain. Cumulative loan originations totaled $36.29 billion across platforms such as Figure ($14.48B active), Tradable ($2.3B active), and Maple ($1.63B active).
Borrowers pay an average APR of 10.14%. Figure dominates with 73% of active loans, operating on the Provenance blockchain. Tradable holds 12% on ZKSync Era, while Maple accounts for 8% across Ethereum, Solana, and Base.
The Future of RWAs: Projections to 2027
Distributed RWAs could reach $30.8 billion (bear), $41.4 billion (base), or $57.0 billion (bull) by the end of 2027, assuming annual growth rates of 25%, 45%, and 70%, respectively.
Tokenized Treasuries are projected to scale to $13.8 billion (bear) or $19.9 billion (bull). Private credit's distributed tokens could reach $3.6 billion (bear) or $6.4 billion (bull), while the underlying active loans could reach $28.5 billion (bear) or $50.6 billion (bull).
The bull case requires specific catalysts: clear regulatory pathways, more compliant secondary trading venues, and deeper integration of Treasuries as collateral across on-chain credit protocols.
Key Catalysts & Remaining Challenges
The UK's FCA signaled a September 2026 crypto licensing gateway. Barclays backed Ubyx for tokenized money infrastructure. Visa and JPMorgan are experimenting with Solana rails. These developments suggest a growing acceptance of blockchain technology within the traditional financial system.
However, challenges remain. Custody solutions for debt instruments, collateral management, and legal enforceability in insolvency all require further clarity before the market can scale significantly. The bear case assumes infrastructure lags and regulatory uncertainty persists.
Four Factors to Watch in the Next 18 Months
- Tokenized Treasuries as Standard Collateral: Widespread adoption across trading venues and lending platforms.
- Solving the Secondary Market Problem: Regulated venues supporting order-book trading for tokenized fund shares.
- Professionalizing Custody & Settlement: Enterprise-grade solutions from custodians like Zodia, Copper, and Fireblocks.
- Deepening Stablecoin Integration: Continued reliance on stablecoins as the liquidity substrate for RWAs.
The $20 billion milestone is a symbolic achievement. What truly matters is whether the infrastructure supporting that $20 billion can handle $50 billion without breaking. The past year has proven that issuance scales rapidly when institutions commit. The next 18 months will be crucial in determining whether market depth, custody rails, and regulatory frameworks can support this continued growth.
Mentioned in this article: Ethereum, Ethena, Stellar, Solana, BNB, Arbitrum, BlackRock, Binance, JPMorgan, Standard Chartered