Tokenized Treasuries Surge to $7.4 Billion as Crypto Investors Seek Higher Yields Over Stablecoins

Rapid Growth in Tokenized Treasuries Reshapes Crypto Investment Landscape

Tokenized U.S. government treasuries and money market products have experienced explosive growth, soaring 80% to reach a total of $7.4 billion in assets, according to a recent RWA.xyz report highlighted by the Financial Times. This sharp surge signals a major shift among crypto investors and funds, who are increasingly moving away from traditional stablecoins in search of more attractive, yield-generating alternatives on the blockchain.

Why Are Crypto Traders Choosing Tokenized Treasuries?

Tokenized treasuries are blockchain-based representations of real-world assets (RWAs) like U.S. government bonds and treasury funds. Leading financial institutions, including BlackRock, Franklin Templeton, and Janus Henderson, have seized this opportunity, with their collective tokenized assets now tripling in value over the past months. These products offer direct exposure to government bond yields—unlike stablecoins, which typically do not provide interest to holders. This yield advantage is driving cryptocurrency traders and institutional investors alike to reallocate capital to tokenized treasuries, seeking to maximize returns during a period of sustained high interest rates. For example, 20-year U.S. Treasuries are currently offering yields approaching 4.9%.

Implications for Stablecoin Issuers

This shift presents notable challenges for major stablecoin issuers such as Tether and Circle. Traditionally, these companies profit by holding U.S. treasuries as reserves and collecting the interest themselves. However, as more liquidity flows into tokenized treasuries that deliver yield directly to holders, stablecoin issuers risk losing a significant portion of their revenue streams. To remain competitive, these issuers may soon be compelled to offer yield themselves, reflecting a potential sea change in the stablecoin business model.

Stablecoin Demand Remains Resilient Despite Outflows

Despite growing momentum behind tokenized treasuries and RWA tokens, stablecoins are still in high demand. Data shows that stablecoin supply has surged from $2.5 billion in January 2025 to $255 billion by July. This dual trend highlights the evolving and diverse needs of the cryptocurrency market, where yield opportunities and the stability of fiat-backed digital currencies are both highly valued.

As the tokenization of real-world assets accelerates, blockchain technology continues to transform the global financial landscape, presenting new avenues—and fresh challenges—for crypto investors and issuers alike.