U.S. Treasuries tokenized have become not only one of crypto’s real-world asset segments, but also one of the fastest-growing. In that market, the leaders have recently changed. Circle’s treasury-backed U.S. Yuan Certificate (USYC) has grown from a market capitalization of about $600 million to nearly $3 billion over the past year.

BlackRock’s tokenized U.S. Treasury product, BUIDL, had a market cap of $2.7 billion and was the second-largest product before USYC overtook it to take the top spot. Over the same period, the broader tokenized U.S. Treasuries market roughly doubled to $15.2 billion, marking 107% year-over-year growth. The contest matters beyond rankings: Circle is the company behind the USDC stablecoin, the second-largest in circulation, and BlackRock is the world’s largest asset manager, so two of the biggest names in finance are now competing directly for institutional on-chain cash.

Why the RWA market changed

Institutional investors have been searching for a reliable and profitable way to earn on-chain yield using short-duration U.S. government debt, and that demand has supported USYC’s growth. Circle’s product is designed for the institutional market and is backed by short-duration U.S. Treasuries.

Unlike stablecoins, USYC represents an asset that is issued and traded through regulated routes, and Circle also acts as a transfer agent. Funds like USYC and BUIDL are blockchain representations of pooled short-dated U.S. government debt, and they pass the underlying Treasury yield through to token holders rather than retaining it, as most stablecoin issuers do with their reserve income.

Token Terminal posted on August 21, 2026:

Circle’s USYC has grown from roughly $600M to $2.9B in market cap over the past year, making it the largest tokenized U.S. Treasury fund
USYC now sits ahead of BlackRock’s BUIDL at $2.7B
Over the same period, the overall market has grown 107% to $15.2B pic.twitter.com/3vUrmHRD3g — Token Terminal 📊 (@tokenterminal) August 21, 2026

BUIDL, the BlackRock product launched alongside Securitize in March 2024, remains a major competing offering. It is built primarily on Ethereum and other EVM-compatible networks. The $15.2 billion total market capitalization cited for the segment is based on data from rwa.xyz and DefiLlama, and treasuries account for more than half of tokenized RWAs. Other managers, including Franklin Templeton and Ondo, also run tokenized Treasury funds, though USYC and BUIDL are the segment’s two largest. U.S. Treasuries are the world’s deepest and most liquid government bond market, and their tokenized wrappers give blockchain users a familiar, cash-like collateral asset.

24/7 regulated collateral

Asset managers, exchanges, and fintech companies can use USYC and BUIDL as 24/7 collateral in blockchain settlement, while still operating within a regulated fund structure. That allows investors to maintain exposure to Treasuries outside traditional stock market hours and to reallocate capital more flexibly during non-standard trading hours.

Source: Investopedia

On the development side, the tokens can also be used as collateral in repo, lending, and derivatives protocols. Developers have also viewed them as better suited for collateral use than unbacked stablecoins.

Legal uncertainty around token-based deposits and funds appears to have eased following statements from regulators in the U.S., the EU, and Hong Kong, which have signaled a degree of acceptance for these token structures.

Interoperability is the next focus for Circle

The growth in RWA tokenization during 2025 and 2026 has been driven by the search for yield and by greater clarity in fund structures. Circle and BlackRock are both expected to broaden access to their tokens through exchanges, custodians, and DeFi integrations. Circle in particular has pointed to pairing USYC with its USDC stablecoin for collateral, margining, and settlement workflows on its platform.

Source: Juno Finance

The next major development will be interoperability among fund providers. Increased secondary-market liquidity and clearer rules for how tokenized funds interact with bank regulations and CBDC pilot projects will also be needed. With the top two funds now separated by only a few hundred million dollars, the race for the segment’s lead remains close as both products expand their reach.