Tokenized Treasuries Surge to $7.4B as Crypto Traders Seek Yield Over Stablecoins
Crypto Investors Shift Toward Tokenized Treasuries, Challenging Stablecoin Dominance
In a sign of changing preferences within crypto finance, investors are moving billions into tokenized Treasury products, favoring yield-bearing assets over traditional stablecoins. According to a new report by RWA.xyz, assets in tokenized U.S. Treasuries and money market products have surged 80% in 2025, reaching $7.4 billion in total value.
This growth signals a meaningful shift in the market, where yield — not just stability — is becoming a top priority for crypto-native investors and funds.
Why Tokenized Treasuries Are Gaining Traction
Tokenized Treasuries work much like their traditional counterparts but are issued as digital tokens on a blockchain. They include products from major financial players such as BlackRock, Franklin Templeton, and Janus Henderson, whose combined holdings have tripled this year, according to the report.
What’s driving adoption? In short: yield.
Unlike stablecoins — which are typically pegged to the U.S. dollar but offer no interest to holders — tokenized Treasuries pass along returns to investors. With U.S. Treasury yields still elevated due to the Federal Reserve’s inflation-fighting stance, this income stream is proving attractive. As of July, 20-year U.S. Treasuries yield roughly 4.89%, far outpacing the 0% yield from most stablecoins.
Trouble Ahead for Stablecoin Issuers?
The rising popularity of tokenized Treasuries could create headwinds for stablecoin giants like Tether (USDT) and Circle (USDC).
These issuers typically hold large amounts of government debt to back their coins — and they collect the interest. If investors pull capital from stablecoins into tokenized alternatives that pay interest directly to holders, issuers could see shrinking reserves and reduced revenue. That pressure could force them to reconsider their business models or even offer yield-bearing stablecoins to stay competitive.
Still Growing: Stablecoin Demand Isn’t Dead Yet
Despite the trend toward tokenized yield, stablecoin supply is also growing, suggesting the two asset types may ultimately coexist. The total supply of stablecoins has climbed from $2.5 billion in January 2025 to $255 billion by July, indicating continued demand for low-volatility assets in trading, lending, and on-chain transactions.
In other words, while tokenized Treasuries are reshaping the savings landscape within crypto, stablecoins remain essential to the day-to-day infrastructure of decentralized finance (DeFi) and centralized exchanges alike.