Tokenized US Treasury Securities Surpass $10 Billion Milestone
The total value of tokenized U.S. Treasury securities has surpassed $10 billion, marking a significant milestone in the evolution of this financial instrument. This achievement confirms that tokenized treasuries have transitioned from a proof-of-concept to operational infrastructure. Notably, Circle’s USYC has overtaken BlackRock’s BUIDL as the largest tokenized treasury product, highlighting the importance of distribution channels and collateral mechanisms over brand recognition.
As of January 22, USYC had $1.69 billion in assets under management, surpassing BUIDL’s $1.684 billion by a margin of $6.14 million, or 0.36%. Over the past 30 days, USYC’s assets grew by 11%, while BUIDL’s shrank by 2.85%, indicating a divergence in net creation flows and redemptions. This shift suggests that the design of collateral workflows and distribution channels plays a more significant role than marketing success in determining the success of on-chain cash equivalents.
Collateral Workflow Design and Distribution Channels
USYC’s structural advantage lies in its distribution via exchange security rails. On July 24, Binance announced that institutional clients could hold USYC and use it as over-the-counter collateral for derivatives, with custody settled through Banking Triparty or Ceffu and redemption in USDC almost instantaneous. In contrast, BUIDL was added to Binance’s over-the-counter collateral list on November 14, four months after USYC. This difference in integration timing has allowed USYC to capture the flow of institutional clients seeking tokenized treasury products.
Furthermore, USYC has been embedded into the operational layer where institutions manage margin and collateral automation. Circle has positioned USYC as a yield-producing security that moves along the USDC rails, enabling institutions that already route stablecoin flows through Circle’s ecosystem to onboard USYC without building new operating paths. BlackRock’s BUIDL, on the other hand, came to market with brand authority but lacked the same level of plug-and-play integration into crypto-native collateral systems.
Product Mechanics and Access Requirements
RWA.xyz labels USYC as “Accumulate,” meaning interest accrues within the token balance, whereas BUIDL is marked as “Distributed,” meaning returns are paid out separately. This distinction is mechanical and not cosmetic, as collateral systems favor set-and-forget balances where the value increases without the need for operational processing of payouts. USYC’s accumulation structure integrates better with collateral automation than BUIDL’s distribution structure.
Additionally, RWA.xyz lists significantly different access requirements for the two products. BUIDL limits access to qualified US buyers and requires a minimum investment of $5 million in USDC, whereas USYC is aimed at non-US investors with a minimum capital of 100,000 USDC. This funnel difference is structural, with USYC’s lower entry threshold and non-US eligibility opening access to a broader range of offshore institutions, family offices, and trading firms that operate outside US regulatory boundaries but still require dollar-denominated, yield-producing collateral.
Net Creation and Redemption Trends
The reversal of USYC and BUIDL’s market positions can be attributed to the difference in net creation and redemption trends. USYC grew by 11% in the last 30 days, while BUIDL contracted by 2.85%. This divergence suggests a discrete event or allocation decision rather than a gradual divergence. USYC’s Binance integration, accumulating income structure, and lower entry threshold all reduce friction, whereas BUIDL did not add comparable distribution dynamics in the same window.
Future Outlook and Market Potential
The $10 billion milestone is less important than the profit margin it represents. Currently, tokenized government bonds account for around 3% to 4% of the stablecoin float. If this rate doubles over the next 12 months, a conservative assumption given current flow dynamics and collateral integration, tokenized treasuries could reach a value of $20 billion to $25 billion. As collateral flywheels accelerate and more venues replicate Binance-style over-the-counter rails, the range is $40 billion to $60 billion.
The metrics that matter are all measurable: net issuance trends, collateral integration announcements, changes in eligibility requirements, and shifts in income management preferences. USYC’s 30-day growth rate and BUIDL’s decline are early signals. The timeline for Binance integration is different, and the funnel gap is one third. USYC’s success can be attributed to its distribution, mechanisms, and access restrictions aligning with the way institutions actually use on-chain collateral.
For more information, visit https://cryptoslate.com/blackrock-just-lost-control-of-the-10b-tokenized-treasury-market-to-circle-for-one-simple-mechanical-reason/
