Tokenised Treasury Bills

Why Tokenise Treasury Bills?

US Treasury bills are the safest dollar-denominated asset in the world — backed by the full faith and credit of the US government. But accessing T-bill yield has traditionally required a brokerage account, minimum investment thresholds, and a T+1 settlement cycle. Tokenised Treasuries wrap T-bill exposure into a blockchain token that can be bought, held and transferred 24/7 with minimal capital. They've become the largest and fastest-growing category in the RWA market.

BlackRock BUIDL

BUIDL (BlackRock USD Institutional Digital Liquidity Fund) is the flagship tokenised Treasury product. Launched in March 2024 in partnership with Securitize, it's the first product from BlackRock's blockchain-enabled fund range. Key facts:

• Issued as an ERC-20 token on Ethereum (also available on Avalanche, Optimism, Polygon and Aptos via native bridges)
• Each token is priced at $1.00 and accrues daily dividend yield paid monthly in USDC
• Underlying assets: US Treasury bills, cash and repurchase agreements — managed by BlackRock
• BNY Mellon serves as custodian; Securitize acts as transfer agent
• Surpassed $2 billion in AUM within months of launch
• Minimum investment: $250,000 for initial subscription (institutional focus)

BUIDL is permissioned — only whitelisted, KYC-verified institutional investors can hold it. However, retail investors can gain indirect exposure through Ondo Finance's OUSG, which itself holds BUIDL.

Ondo Finance OUSG

OUSG (Ondo Short-Term US Government Bond Fund) is a tokenised fund that provides exposure to short-duration US Treasuries. After BUIDL launched, Ondo migrated OUSG's underlying holdings to BUIDL, making it essentially a tokenised wrapper around BlackRock's tokenised fund:

• ERC-20 token on Ethereum, also bridged to Polygon, Arbitrum and other chains
• Minimum investment: $5,000 (far more accessible than BUIDL's $250K minimum)
• Instant redemption via the Ondo protocol — no multi-day settlement
• Yield accrues to the token price automatically (no separate claim process)
• OUSG can be used as collateral in DeFi protocols like Flux Finance

Ondo also issues USDY (Yield Dollar), a tokenised note backed by T-bills and demand deposits, designed to be more DeFi-compatible and accessible to international investors.

Franklin Templeton FOBXX

FOBXX (Franklin OnChain US Government Money Fund) is notable for being the first US-registered mutual fund to record transactions on a public blockchain. Launched by Franklin Templeton — a $1.5 trillion asset manager — in 2021:

• Uses the Stellar blockchain (originally) and has expanded to Polygon, Arbitrum and Avalanche
• Each share is $1.00 and accrues daily yield
• Available through the Franklin Templeton mobile app and via the Benji Investments platform
• Minimum investment: as low as $20 via the Benji platform
• One of the few tokenised funds accessible to US retail investors

Other Notable Tokenised Treasury Products

• Hashnote USYC — tokenised Treasury fund on Ethereum, acquired by Circle in 2025; deeply integrated with DeFi
• Treasury Bill Token (TTB) by OpenEden — tokenised T-bills accessible via multiple DeFi platforms
• sDAI by MakerDAO/Sky — not a direct T-bill token, but a savings token backed by MakerDAO's T-bill reserves
• Superstate USTB — tokenised Treasury fund by Superstate, a crypto-native asset manager
• Polygon's T-bill offerings — several native tokens on Polygon's chain for Treasury exposure

How Yield Works

Tokenised Treasury products generate yield from the underlying T-bills. The yield is passed to token holders in one of two ways:

Price Appreciation

The token's NAV (net asset value) increases daily to reflect accrued interest. OUSG and FOBXX work this way — the token price goes up over time, and investors realise the gain when they sell or redeem.

Dividend Distribution

Yield is paid out periodically as a separate token (usually USDC) directly to holders' wallets. BUIDL uses this model — monthly USDC distributions.

Using Tokenised Treasuries in DeFi

One of the key innovations of tokenised Treasuries is their DeFi composability. Unlike traditional T-bills, tokenised versions can be:

• Used as collateral for loans on lending platforms
• Supplied to liquidity pools for trading yield
• Borrowed against to leverage other positions
• Combined with other DeFi strategies (e.g., looping yield)

This turns a passive government bond into a productive DeFi asset. However, it also introduces additional risks — smart contract risk from the DeFi protocol on top of the RWA token's own risks.

Tokenised Treasuries vs Stablecoins

Tokenised Treasuries and yield-bearing stablecoins (like USDC's forthcoming yield feature) serve different purposes:

• Stablecoins aim to maintain a $1.00 peg and are primarily for payments and trading
• Tokenised Treasuries are investments that fluctuate in value and accrue government bond yield
• Tokenised Treasuries have redemption windows; stablecoins are typically redeemable on demand
• Tokenised Treasuries offer higher yields (4–5% vs 0% for most stablecoins)

The Bottom Line

Tokenised Treasuries are the most mature and liquid segment of the RWA market. With BlackRock, Franklin Templeton and Ondo Finance leading the way, they offer investors a way to earn government bond yield with the flexibility of blockchain settlement. For UK investors, the main barrier is regulatory — most products are only available to US or accredited investors. Check our investor guide for practical access routes.

Learn More

• How RWA Tokenisation Works — the technology behind these products
• Tokenised Private Credit — the next biggest RWA category
• Risks of RWA Tokenisation — understanding the risks

Nothing on this site is financial advice. All content is for educational purposes only. Always do your own research and consult a qualified financial adviser before making investment decisions. Back to all guides