Why Short-Term Treasuries Became the Next Main Character
Until 2024, RWA (Real-World Assets) meant one thing: non-standard assets like real estate, commodities, and private debt. By 2026, the center of mass had shifted entirely to short-term U.S. Treasury bills. BlackRock's BUIDL, Franklin Templeton's BENJI, and Ondo Finance's OUSG — collectively, these onchain Treasury-backed money markets surpassed $80 billion in total value by Q1 2026. That represents roughly a 4x increase year-over-year.
The reason for the dramatic expansion is straightforward: yield, delivered consistently by trusted institutions (BlackRock, Franklin, Apollo). While DeFi-native yields — staking, liquidity provision — fluctuate with market conditions, tokenized Treasuries offer a steady 4–5% return linked to SOFR. The institutional preference shifted from "earning in DeFi" to "running traditional finance on-chain."
Regulation and Issuers — Who Built the Bridge?
The expansion became possible because of regulatory clarity. In 2025, the SEC published a series of guidance documents on tokenized securities, spelling out onchain distribution via Reg D and Reg S, secondary market restrictions, and KYC/AML implementation requirements. Europe saw MiCA II and an extended DLT Pilot Regime operating in parallel. Singapore's MAS Project Guardian transitioned from institutional pilot programs into live operations.
Japan's Financial Services Agency revised its framework on "Tokenization of Specified Assets" at year-end 2025, clarifying that both trust-based and special-purpose company structures could support onchain Treasury products. Nomura, SBI, and MUFG Trust have since launched domestic tokenized money markets.
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Connection to DeFi — Treasuries as Collateral
RWA's most significant impact on onchain finance comes not as a yield product, but as collateral. MakerDAO (now Sky) now holds over 60% of its balance sheet in Treasury-backed RWA, anchoring DAI yield to Treasury rates. Aave V4 and Morpho have operationalized borrowing markets using tokenized Treasuries as collateral, making them the standard option for institutions seeking dollar-denominated loans. This shift is quiet but profound. The structural fragility of 2022 — the assumption that collateral must be crypto-native — is finally beginning to disperse. Onchain leverage is no longer indexed to crypto asset prices alone.
Where RWA Remains Constrained
What about RWA beyond Treasuries? Private credit (Maple, Goldfinch, Centrifuge) continues to grow steadily for institutional niche use cases, but remains roughly one-tenth the size of tokenized Treasuries. Real estate tokens still struggle with liquidity; few secondary markets actually function. Carbon credits and IP tokenization remain hamstrung by the difficulty of valuing and verifying underlying assets. Putting something onchain is easy; guaranteeing that its digital representation maps uniquely to real-world rights is not — and the industry lacks cross-sector standards.
Unresolved Questions
First: issuer concentration. BlackRock alone controls over 30% of all RWA AUM, raising systemic risk concerns. The paradox of decentralized finance backed by centralized issuers remains structurally unresolved.
Second: oracle dependency. Onchain Treasury price feeds are concentrated among a handful of providers like Chainlink. Price reliability has become more of an institutional problem than a technical one. Oracle failures carry risks harder to verify than contract code itself.
Third: user protection. Products traded under U.S. Reg D restrictions increasingly reach users outside that jurisdiction through secondary markets and bridges. The assumption that "onchain means borderless" will inevitably collide with the reality of securities regulation in the years ahead.
Tokenized Treasuries no longer make headlines. What matters now is how deeply this infrastructure embeds itself within traditional finance — and what, if anything, remains truly distributed once it does.