In April 2025, tokenized U.S. Treasuries surpassed $5.75 billion in total issuance on public blockchains, marking a new milestone for institutional adoption of real-world assets (RWAs). BlackRock, Franklin Templeton, Fidelity, and Apollo are just a few of the institutional players entering the market with tokenized treasury and money market fund (MMF) offerings. 

For financial institutions, tokenized fixed income products, including both tokenized Treasuries and tokenized MMFs, represent a practical, low-risk, and scalable entry point into on-chain fund structures. As demand grows and regulatory frameworks evolve, this segment is emerging as a core strategy within institutional finance.

This article refers to two common categories of tokenized fixed income products:

• Tokenized U.S. Treasuries: Digital representations of individual U.S. government securities issued on-chain.
  
• Tokenized Money Market Funds (MMFs): Fund vehicles holding a pool of short-term, low-risk debt instruments such as Treasuries, repos, and commercial paper, now represented as tokenized shares.

While structurally distinct, both formats cater to the growing demand for secure, yield-bearing investment products in digital-native formats.

Investor Demand Is Rising

The rising interest in tokenized funds isn’t driven by one type of investor. It’s a convergence of demand from both traditional capital allocators and digital-native wealth. 

1. Traditional Capital Allocators Are Rebalancing Portfolios Toward Tokenized Funds

According to an EY survey, 77% of institutional and high-net-worth investors are actively exploring tokenized assets. Importantly, these investors aren’t just curious, they are reallocating. The study estimates that by 2026, institutional investors will dedicate 5.6% of their portfolios to tokenized assets, while HNW individuals are targeting 8.6%.

2. Crypto-Native Capital Seeks Safe, Yield-Bearing Assets

Parallel to traditional capital, the crypto market is giving rise to another source of investor demand. As of April 2025, over $230 billion is stored in stablecoins and much of that capital is actively seeking yield-bearing, transparent, and regulated investment products, especially during volatile crypto market cycles.

Unlike traditional investment options that require off-ramping into fiat, tokenized fixed income products enable stablecoin holders to access institutional-grade yield while remaining fully on-chain.

In response, several institutional-grade tokenized products have emerged to meet this need. On InvestaX, offerings such as InvestaX Earn and Matrixdock’s STBT allow stablecoin holders to participate in short-term U.S. Treasury strategies with as little as 100 USDC. These solutions enable investors to earn daily yield accrual while retaining full on-chain liquidity and benefiting from a regulated platform licensed under Singapore’s MAS.

Tokenized Money Market Funds: Explained

A tokenized MMF is a blockchain-based version of a traditional money market fund. Investors receive security tokens representing shares in a fund holding short-term, low-risk debt like T-Bills, repos, and deposits.

Key Characteristics:

• Blockchain-Based Representation of shares
  
• 24/7 Trading Access and faster settlements
  
• Programmability for compliance and yield payouts
  
• Fractional Ownership for more accessible minimums
  

These funds maintain traditional risk profiles but offer improved efficiency, transparency, and market reach.

Tokenized Treasuries: Explained

Tokenized Treasury bills (T-bills) are blockchain-based representations of short-term U.S. government debt instruments. Each token reflects ownership in either a direct Treasury holding, a Treasury-backed fund, or a structured product that delivers U.S. government bond yields.

These digital instruments retain the risk profile and economic exposure of traditional Treasuries but offer a reimagined framework for how they are issued, accessed, and transacted.

Use Cases in Action

The utility of tokenized fixed income products such as tokenized MMFs and treasuries isn’t theoretical. Several products are already delivering real-world yield and market engagement.

InvestaX Earn

InvestaX Earn is a curated investment channel offering regulated access to short-term U.S. Treasury strategies.

Qualified investors can participate in yield-bearing instruments backed by U.S. government debt with as little as 100 USDC and start earning instantly, with daily yield distribution.

Matrixdock’s Short-Term Treasury Bill Token (STBT)

STBT is an on-chain token backed by short-duration U.S. Treasuries.

STBT maintains a 1:1 peg to USD, with interest rebased daily to token holders.

Designed for accredited investors seeking Treasury yield exposure via blockchain-native infrastructure.

BlackRock BUIDL

BlackRock BUIDL is one of the largest tokenized MMFs, with ~$2.5B in AUM as of April 2025.

BUIDL provides institutional clients access to on-chain capital parking, while retaining DeFi-native functionality such as lending and collateralization.

Franklin Templeton’s Tokenized MMF

Franklin OnChain U.S. Government Money Fund (FOBXX) was launched in 2021, FOBXX was one of the first tokenized MMFs by a major institution.

The fund invests in U.S. government securities, repos, and cash.

Natively issued on blockchain, with over $380M in AUM.

UBS Asset Management Tokenized MMF

UBS launched its first tokenized money market fund in November 2024. The fund was created to explore enhanced liquidity solutions and improved fund distribution.

It represents a step forward in institutional adoption of tokenized assets.

Hashnote's USYC

USYC represents the Hashnote International Short Duration Yield Fund Ltd. (SDYF).

The fund primarily invests in reverse repos backed by U.S. government securities.

As of March 2025, it manages ~$1B in assets, targeting both U.S. and international investors.

Why Institutional Issuers Should Act Now

The timing for entering this space is a strategic move to build long-term value.

• Capital is available and interested
  Tokenized fixed-income products are the first stop for investors looking to transition from crypto into regulated yield.
  
• Distribution networks are forming now
  Platforms like InvestaX are already live with regulated products and integrated investor channels across Asia and the Middle East.
  
• Regulation is maturing
  Clearer frameworks under MiCA (EU), MAS (Singapore), and VARA (UAE) enable compliant issuance and investor onboarding.
  
• First-movers advantage
  Firms that tokenize early will benefit from brand credibility, investor familiarity, and platform preference as capital continues shifting on-chain.

How InvestaX Supports Tokenized Treasury & MMF Issuers

As a licensed Capital Markets Services (CMS) and Recognized Market Operator (RMO) platform regulated by the Monetary Authority of Singapore (MAS), InvestaX offers:

• End-to-end issuance and lifecycle management
  
• Distribution to over 20 million verified users via regulated partners
  
• Secondary market access via integrated exchanges
  
• Customizable deal structures, custody, and investor onboarding workflows
  

Whether you're a fund manager looking to issue a new product or a financial institution exploring tokenized liquidity products, InvestaX provides the infrastructure and network to scale securely.

Final Thoughts

Whether you’re exploring direct tokenized treasury exposure or looking to structure a money market fund for broader liquidity access, the opportunity to launch regulated, tokenized fixed income products is now both viable and scalable.

The infrastructure is ready. The demand is growing. And the early players are already live.

Ready to issue your tokenized MMF or Treasury product?
Contact the InvestaX team to get started.