US Tokenized Treasuries Soar by 641% in 2023, CoinGecko Report Reveals
Summary:
CoinGecko's 2024 report indicates a 641% rise in US tokenized treasuries in 2023 with significant involvement from conventional finance institutions. Franklin Templeton, an asset management firm, led the charge as the principal issuer of tokenized treasuries. Tokenized securities are backed by real-world assets like stocks and bonds. The report also saw an influx in yield-bearing stablecoin protocols supported by US treasury bills, with most tokenized treasuries based on the Ethereum network. While the growth rate of tokenized treasuries has slowed in 2024, commodity-backed tokens have seen significant growth, with Tether Gold and PAX Gold leading the market.
In the US, tokenized treasuries experienced an impressive surge of 641% in 2023, as conventional finance ventures jumped on board, as documented by CoinGecko, the online platform tracking virtual asset data. CoinGecko, on March 21, released its 2024 report, "Rise of Real World Assets in Crypto," shedding light on the advancement in tokenizing physical-world assets. The report indicated that from January 2023 ($114 million) to December 2023 ($845 million), tokenized treasuries experienced significant growth. This translates to a 641% yearly growth for blockchain-created digital tokens that symbolize US Treasury securities.
Tokenized securities are essentially digital tokens backed by physical-world assets like stock and bonds. For instance, the Ondo Short-Term US Government Bond Fund utilizes the OUSG token to signify the possession of a share in the fund and its corresponding yield.
In the report, CoinGecko underscored Franklin Templeton, the asset management company, as the primary issuer of tokenized treasuries, having issued tokens equal to $332 million with its On-Chain US Government Money Fund, making up 38.6% of this market. Interestingly, Franklin Templeton is among the ten ETF issuers that introduced a spot Bitcoin ETF in the US in January. Furthermore, it has submitted an application to the Securities and Exchange Commission for a Franklin Ethereum ETF.
Apart from Franklin Templeton, other yield-bearing stablecoin protocols supported by US treasury bills are also witnessing a surge in popularity. For example, the Mountain Protocol's USDM tokens that were introduced in September 2023, have now shot up from $26,000 to $154 million.
Most tokenized US treasuries are based on the Ethereum network. According to the report, 57.5% of these tokens use Ethereum, and firms such as Franklin Templeton and WisdomTree Prime have issued tokenized securities on Stellar, controlling 39% of the market.
While tokenized treasuries saw substantial growth in 2023, it decelerated in 2024, with growth in January 2024 being only 1.9%. By February 1, they had managed a market capitalization of $861 million.
The report also highlighted the rise in commodity-backed tokens achieving a market capitalization of $1.1 billion by February 1. Tether Gold and PAX Gold are dominating in tokenizing precious metals with 83% of market capitalization. Also, a new venture has begun tokenizing uranium, facilitating the exchange of the valuable metal for digital tokens.
Published At
3/21/2024 2:12:19 PM
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