21co Analyst Tokenization of US Bond Market Expected to Reach 3 Billion by the End of This Year

According to Tom Wan, an analyst at digital asset company 21.co, the total market value of tokenized US government bonds could reach $3 billion by the end of 2024, as the adoption of decentralized finance (DeFi) projects and decentralized autonomous organizations (DAOs) for real-world assets (RWAs) continues to rise. Wan believes that this trend is driven by the demand for asset diversification and stability in DeFi projects. Notable examples include the Ethereum Layer 2 network Arbitrum and the lending protocol MakerDAO, which have allocated $27 million and $1 billion worth of assets respectively to these interest-bearing products. Data from Dune shows that “BlackRock USD Institutional Digital Liquidity Fund” (BUIDL), issued by BlackRock in March this year, has become the largest tokenized government bond fund with a market value of nearly $520 million, surpassing Franklin Templeton’s BENJI fund (with a market value of approximately $400 million). Wan stated that financial companies such as BlackRock and Securitize are planning to provide diversified options for the cryptocurrency ecosystem in order to gain risk-free returns from US government bonds without leaving the blockchain ecosystem. Wan believes that this trend will continue in the long term, stating, “We may see the total market value of tokenized US government bonds increase to over $3 billion by the end of 2024.” Data compiled by 21.co shows that the total assets under management of tokenized government securities currently amount to approximately $1.7 billion, with a total of 17 tokenized government securities products issued. In addition to the aforementioned financial companies, companies or protocols issuing these tokenized products include Ondo Finance, Backed Finance, Matrixdock, Maple Finance, and Swarm. Related articles: “The Only Solution for Medium-Term RWAs: A Discussion on Web3 National Debt Business” and “Moody’s: Tokenization Growth Depends on the Development of Blockchain-Driven Secondary Markets.”