Reported by Cointelegraph, the BlackRock USD Institutional Digital Liquidity Fund is now the largest treasury fund tokenized on a blockchain after it surpassed Franklin Templeton’s product this week.
BlackRock’s six-week-old product, tickered BUIDL, has notched a market capitalization of $375 million, surpassing the 12-month-old Franklin OnChain U.S. Government Money Fund (BENJI), which sits at $368 million, according to Dune Analytics.
It comes as BUIDL took in $70 million last week, including $50 million from real-world asset tokenization firm Ondo Finance’s OUSG token.
Meanwhile, BENJI’s assets under management shrunk around 3.7% over the same timeframe.
More than $1.2 billion worth of United States Treasurys now exists across Ethereum, Polygon, Solana and other blockchains.
Blockchain-based tokenization of real-world assets has become a hot topic lately, with BlackRock CEO Larry Fink recently voicing that capital markets could be made more efficient by moving on-chain.
However, investor demand for these tokenized products is low at the moment, according to 21.co research strategist Tom Wan, citing “thin liquidity” as one of the primary reasons.
This creates a “chicken and egg problem,” as issuers are struggling to see a clear benefit in tokenizing assets on-chain with low demand, Wan said in an April 30 X post.
The good news is that demand for U.S. Treasurys already exists from industry players in the $140-billion stablecoin market.
Therefore, “it will be easier to find end investors to switch over” when demand picks up, Wan explained.
Tokenized government securities currently account for 1.4% of the total assets tokenized on-chain — up from 0.1% at the start of 2023. However, Wan predicts this market dominance will increase to 10% in the future.
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