The market for tokenized Treasury bonds has grown sixfold this year to $668 million, according to one data provider.
On Friday, the OpenTrade platform, providing lending and yield through blockchain technology, launched a tokenized pool of US Treasury accounts. This offering is available to individual accredited investors, regulated institutions, companies, funds, and decentralized autonomous organizations. Third-party distributors have the option to integrate the OpenTrade pool into their systems and offer their own yield-managed products under their brand.
Enigma Securities, WOO X, Resonate, Kyber Network, and Sino Global Capital are among the initial distribution partners and liquidity providers for OpenTrade. Additionally, Five Sigma, a structured finance firm from the UK, supports over-the-counter operations.
This move aligns with the growing trend of tokenizing traditional financial instruments, such as government bonds, private stocks, and loans, on the blockchain, known as Real Asset Tokenization (RWA). Major banks are exploring ways to leverage blockchain technology for such purposes.
Due to their high yield and low-risk nature, US Treasury bonds are considered ideal for tokenization efforts. The market for tokenized Treasury bonds has expanded sixfold this year to $668 million, with Franklin Templeton emerging as a major player.
The tokenized pool of Treasury bonds by OpenTrade was developed using Circle's Perimeter Protocol, an open-source credit-on-chain solution, and operates on the USDC stablecoin.
In addition to the pool of US Treasury accounts, OpenTrade plans to introduce various on-chain yield-managed products, including investment-grade commercial papers and supply chain financing. According to founders Dave Sutter and Jeff Handler, trade financing using blockchain rails is particularly attractive, as there is an estimated $2.5 trillion unsatisfied demand for market participants, according to the Asian Development Bank report.