Analyzing Tokenization of U.S. Treasuries as On‑Chain Real‑World Assets: Product Structure, Market Implications, and Regulatory Concerns

Abstract

The tokenization of real-world assets (RWAs)—particularly U.S. Treasuries—is rapidly bridging the gap between traditional finance (TradFi) and decentralized finance (DeFi), offering fractional ownership, 24/7 settlement, and reduced reliance on intermediaries. Tokenized Treasuries, one of the fastest-growing RWA sectors, provide low-risk exposure to U.S. government debt with added benefits of liquidity, transparency, and programmable automation. Despite their appeal, the market is hindered by fragmented disclosures, jurisdictional inconsistencies, and regulatory ambiguity. To assess these challenges, we conducted due diligence on 47 tokenized Treasury products listed on RWA.xyz, extracting on-chain activity and issuer data via custom Python scripts. We analyzed key stakeholders, legal frameworks, peg mechanisms, transaction patterns, and investor eligibility. Our research shows that tokenized U.S. Treasuries offer yield-bearing exposure backed by government debt and are accessible to KYC-compliant wallets. Compared to most native crypto assets, they provide greater efficiency and stability.

However, the market remains highly concentrated, with 69% of assets issued by just three entities (BlackRock, Franklin Templeton, and Ondo), introducing systemic dependencies and custodial risks. The lack of consistent legal protections and dispute resolution mechanisms, especially across international jurisdictions, raises additional concerns about long-term resilience. Regulatory uncertainty, including the risk of classification as unregistered securities by the SEC, further complicates adoption and may hinder broader institutional engagement. Yet the model holds promise. Tokenized Treasuries deliver reliable yield, broad wallet-based access, and superior liquidity versus native crypto assets. Their continued growth will depend on improved legal clarity, diversification of issuers, and deeper institutional trust.