Assets in tokenized Treasury and money market products rose 80% to $7.4 billion, a RWA.xyz report says.
Stablecoin issuers could be in trouble as investors and funds shift from stablecoins to higher-yield alternatives. On Monday, the Financial Times covered a report by RWA.xyz on the state of asset tokenization. According to the analytics firm, tokenized Treasury products rose 80% to $7.4 billion so far in 2025.
These products include Treasury funds that issue their own tokens, as well as tokenized U.S. government bonds. Notably, issuers like BlackRock, Franklin Templeton, and Janus Henderson have seen their combined holdings triple.
The reason for the rapid growth of this asset class is its advantage over stablecoins. Stablecoins typically don’t distribute yield to holders, while tokenized Treasuries do. As a result, traders are moving from stablecoins toward this more lucrative way to save.
Treasury bond yields depend on interest rates, which remain relatively high due to Federal Reserve concerns over inflation. Specifically, 20-year U.S. Treasuries currently yield approximately 4.893%.
Tokenized treasuries spell bad news for stablecoin issuers
For stablecoin issuers like Circle and Tether, this trend poses a significant risk. Issuers earn revenue by holding Treasuries as collateral and collecting interest payments themselves.
If outflows from stablecoins into tokenized Treasuries continue, issuers may lose a key revenue source. Additionally, they could be pressured to offer yields on their own stablecoins to compete.
Still, despite the rising interest in tokenized Treasuries, demand for stablecoins is growing. Specifically, stablecoin supply has been steadily increasing since the start of this year, rising from $2.5 billion in January of 2025 to $255 billion in July of 2025.