Tradeteq, a U.K.-based private debt and real-world asset marketplace, announced on Tuesday the launch of a tokenized U.S. Treasury offering on the layer 1 blockchain XDC Network. The U.S. Treasury Yield (USTY) tokens represent blockchain-based versions of shares in a U.S. Treasury bond exchange-traded fund (ETF), and are accessible for professional investors on Tradeteq’s Yieldteq platform. Tokenization service provider Securitize is responsible for onboarding buyers, tracking share ownership, and managing dividend payouts.
The tokenization of real-world assets (RWAs) has become a popular trend in the digital asset industry. According to a Bank of America report, tokenization of RWAs could transform the financial infrastructure, while Bernstein forecasted it could grow a $5 trillion market in the next five years. Demand for tokenized Treasuries has grown nearly sixfold to $622 million this year, according to rwa.xyz. Crypto firms and investment funds are seeking these products to enjoy higher government bond rates, while yields in crypto lending have plunged amid massive deleveraging during the bear market.
XDC joins a fierce competition between blockchains to be the premier venue for tokenized assets. Stellar and Ethereum are the leading markets for tokenized Treasuries, but other networks are also making headway with RWA adoption. JPMorgan executed trades with tokenized versions of the Japanese yen and the Singapore dollar using the Polygon (MATIC) network, while Securitize issued equity tokens of a real estate investment trust on the Avalanche (AVAX) blockchain.