Tokenized Treasuries: What They Are, and Who Can Actually Hold Them

A tokenized Treasury is a share in a fund holding short-dated US government debt, with ownership recorded as a token on a blockchain rather than only in a transfer agent's database. A business already holding dollars onchain can earn money market yield without going back through the banking system. The catch most explainers skip: nearly all of these products are sold only to professional or qualified investors, at addresses the issuer approved in advance. This page is not investment advice.

What is a tokenized Treasury, exactly?

It is a regulated fund with a token as its share register. The fund holds short-dated US Treasury bills, repurchase agreements and cash, exactly as a government money market fund does. What differs is the record: each share is a token on a blockchain — a shared ledger maintained by many independent computers, which is what "onchain" means — not an entry in a transfer agent's books. Ownership therefore moves in minutes rather than settling next business day.

The token is not the Treasury bill. It is a claim on a fund that holds them, worth what the legal structure behind it makes it worth — a point developed in how to tokenize an asset.

Why do these products exist?

Because a treasurer holding USDC earns nothing on it. USDC is a stablecoin — a token designed to hold a value of one US dollar, backed by cash and short-dated government debt — and the income on those reserves accrues to the issuer, not the holder. The three-month Treasury bill yielded about 3.8% at the end of August 2026 on the Federal Reserve's constant-maturity series: on $50 million, a seven-figure annual sum to leave behind.

The obvious fix, wiring the money to a bank and buying a money market fund, costs what made the balance useful: instant, round-the-clock settlement. A tokenized Treasury fund tries to keep both, subscribing and redeeming in USDC. Other routes to yield on stablecoin balances carry different risks, compared in USDC yield options.

Who is actually allowed to hold one?

For most of these products, not you. The large funds are sold under private-placement or offshore exemptions restricted to qualified purchasers, accredited or professional investors and institutions, and the restriction is enforced technically: only allowlisted addresses can receive the token, and a transfer anywhere else fails.

The specifics differ sharply and are worth naming. BlackRock's BUIDL is offered under Regulation D Rule 506(c) and Section 3(c)(7) of the Investment Company Act, so every buyer must be a qualified purchaser — broadly, an individual with at least $5 million in investments or an institution with $25 million — and reported subscription minimums run to millions, not thousands. Securitize Markets, a registered broker-dealer, is placement agent; Securitize, LLC is transfer agent and runs the allowlist; BNY Mellon is custodian and administrator. Circle's own USYC, the token for the Hashnote International Short Duration Fund, is a Cayman fund open only to non-US persons under Regulation S, with a $100,000 minimum per Circle's documentation. Ondo's OUSG requires investors to be both accredited investors and qualified purchasers, at a $5,000 minimum for its instant route and $100,000 for standard subscriptions; its sister token USDY is Regulation S, non-US persons only.

One product breaks the pattern. Franklin Templeton's BENJI represents shares in FOBXX, a US-registered 1940 Act government money market fund whose share register lives on a public blockchain. Because it is registered rather than exempt, US retail investors can buy it through the Benji app. Franklin Templeton and the Stellar Development Foundation said in April 2026 that the BENJI suite held about $2 billion.

That split — one registered retail fund against a wall of private placements — is the honest centre of the subject. The allowlist means the token is not freely tradable, "liquidity" exists only among a closed set of approved holders, and the retail reader of a headline about tokenized Treasuries generally cannot buy the thing described.

How do subscription and redemption work?

You subscribe by sending USDC or wiring dollars to the fund's agent, who issues tokens to your allowlisted address at net asset value; redemption reverses it. Yield accrues either by increasing your balance daily or by lifting the token's value, and which it is changes your accounting.

The detail that matters is the redemption window. Some funds redeem only on business days within dealing hours, so a nominally round-the-clock asset can still take until Monday to become dollars. Others offer near-instant USDC exits. Circle announced in April 2024 a smart contract giving BUIDL holders a round-the-clock route into USDC — a secondary transaction with Circle, not a redemption by the fund. Ondo's documentation describes 24/7 instant minting and redemption of OUSG against USDC and PYUSD above a $5,000 minimum, subject to daily caps published on its site. Circle's USYC documentation describes USDC subscriptions and redemptions settling in a single block below a stated instant capacity, and T+0 or T+1 above it.

The pattern holds: instant liquidity exists, it is capped, and the cap is the number to ask about.

What are the risks?

This is a fund — a manager, a custodian, an administrator, a legal wrapper — not a yield source that exists by itself, and several risks stack in one instrument. The fund's own: interest-rate and duration risk, small at the very short end but not zero, plus the credit of its repo counterparties. Structural: manager, custodian and transfer agent are parties you depend on, and your recourse is whatever the fund documents provide in whichever jurisdiction they were drafted. Technical: the token contract, the program enforcing balances and transfer rules, can carry bugs or administrative powers. And settlement-asset risk, since you hold USDC exposure at both ends.

It is not a bank deposit, carries no deposit insurance, and yields fall as fast as short-term rates do. That is not a reason to avoid one; it is the list of questions to ask first, alongside treasury operations.

What does Arc change?

Arc is a Layer-1 blockchain built by Circle, the issuer of USDC, live since September 16, 2026, on which gas — the fee every blockchain charges to process a transaction — is paid in USDC rather than a separate volatile token. For a fund whose subscriptions, redemptions and yield are all dollar-denominated, that removes the need for a second asset purely to move the first.

Circle's August 5, 2026 press release said BlackRock is expected to deploy BUIDL on Arc, letting institutions subscribe, redeem and deploy fund assets in one onchain environment; BlackRock is also one of Arc's eleven founding validators. How much value sits in tokenized Treasury products on Arc is a question of weeks of history, and we are not publishing a figure that would be wrong within one; the running detail is in BUIDL on Arc. Arc also supports opt-in confidential transfers, which shield amounts while addresses stay visible.

Frequently asked questions

Is a tokenized Treasury the same as a stablecoin?

No. A stablecoin is designed to stay at one dollar and pays the holder nothing; a tokenized Treasury is a fund share whose value reflects the fund's assets and accrues yield. Different regulatory treatment, and only one of them is a security.

Can I buy tokenized Treasuries as an individual?

Usually not. Most are restricted to qualified, accredited or professional investors, enforced through an allowlist of approved addresses. Franklin Templeton's BENJI is the outlier, because FOBXX is a US-registered money market fund open to retail through its app.

What is BUIDL?

BUIDL is BlackRock's tokenized fund holding cash, US Treasury bills and repurchase agreements, with shares issued as tokens. It runs into billions of dollars, is sold only to qualified purchasers under Regulation D Rule 506(c), is placed by Securitize Markets, and has been issued on chains including Ethereum, Aptos, Arbitrum, Avalanche, Polygon, Solana and BNB Chain.

What happens if the token contract has a problem?

Your legal ownership rests on the fund's documents and its register, not the token alone. Issuers generally retain the ability to freeze or reissue tokens for exactly this reason — a reminder that these are not bearer instruments.