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- The race to tokenize T-bills is on
The race to tokenize T-bills is on
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Each week in The Snapshot, we share data-driven insights, highlight new listings, and showcase our latest product updates.
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Only ~10% of onchain dollars pay yield today, but that share could change quickly. Stablecoins proved that tokenized dollars can scale, while tokenized funds introduce a different model: yield that passes to holders. This week, we look at the size of the yield-bearing dollar market, why the source of yield matters, and why tokenized U.S. Treasuries may become the base layer for low-risk, yield-bearing dollars onchain.
1) Yield is not yet the default
Only ~10% of onchain dollars currently pay yield to holders. Stablecoins account for $302.4B in market size, compared to $29.6B for tokenized funds. Stablecoins remain one of crypto’s clearest examples of product-market fit, but they typically do not pass yield through to holders. Tokenized funds are smaller, but the category has grown ~100% YoY.
The difference is often who receives the yield. Stablecoins and tokenized funds can both provide exposure to U.S. Treasuries and other cash equivalents. Stablecoin issuers like Tether and Circle typically retain most reserve income. Tokenized funds are designed to pass yield to holders.
Yield-bearing dollars remain a minority because the dominant structure does not distribute yield. Stablecoins dominate because they are liquid, widely integrated, and easy to use. If regulation allows yield-bearing products to become more transferable, users may have less reason to hold non-yield-bearing assets. The 10% share may be a starting point, not a ceiling.
2) APY is not the full story
Not all yield-bearing dollars are created equal. sUSDai, syrupUSDC, and sUSDS all offer yield, but the yield comes from different sources. sUSDai lends to early-stage AI companies, syrupUSDC lends to institutional borrowers, and sUSDS is backed by a mix of yield-generating strategies.
The variation in yield reflects different underlying exposures. Higher APYs can mean higher credit risk, lower liquidity, or more complex underwriting. Yields can also be harder to maintain at scale if the underlying strategy’s borrow demand is limited.
Investors should not compare funds by yield alone. The key question is who pays the yield. A “USD” label does not necessarily mean stablecoin, T-bill exposure, or low-risk dollar yield. The label may look similar, while the underlying risk is materially different.
3) The lowest risk segment is still contested
A subset of yield-bearing dollars is backed by U.S. Treasuries. The tokenized U.S. Treasury market totals $13.1B across the top 20 assets, with no single issuer dominating yet. Unlike stablecoins, where Tether’s USDT and Circle’s USDC lead the market, tokenized U.S. Treasuries remain split across crypto-native issuers like Ondo and Superstate, as well as TradFi incumbents like BlackRock and Fidelity.
U.S. Treasuries are the benchmark for low-risk dollar yield. These products lend to one of the largest and most trusted borrowers in the world: the U.S. government. A U.S. government default would be a global market event, not a fund-specific issue.
T-bill-backed tokenized funds position themselves as the base layer for low-risk, yield-bearing dollars onchain. Tokenized U.S. Treasuries are potentially a multi-trillion dollar market with no clear winner yet. Because the Treasury market is deep, issuers can grow AUM without needing to find new borrowers or take on more complex credit risk.
4) A single issuer could shift the market
Fidelity’s offchain money market fund is ~3,000x larger than its tokenized fund. SPAXX has ~$450B in assets, while FDIT has ~$150M. Both products are designed to provide exposure to U.S. Treasuries and other cash equivalents.
Moving even one large fund onchain would change the size of the market. SPAXX alone is larger than the entire tokenized asset market today. If Fidelity brought a meaningful share of that fund onchain, yield-bearing dollars would become a much larger part of the market.
The best issuers know how to turn large addressable markets into products investors actually use. Names like Fidelity are well positioned to navigate this path given their scale, distribution, and long operating history. The opportunity is large, but execution will determine who captures it.
Explore the full dataset here.
Most projects with liquid tokens do not provide regular, standardized reporting to their stakeholders. Token Terminal's reporting initiative exists to close this gap, giving investors the data to evaluate onchain businesses on fundamentals rather than narratives alone.
Token Terminal publishes standardized quarterly reports covering key financial and operational metrics alongside qualitative commentary from the respective core team. Quarterly reports are now rolling out for Q1 2026.
Featured report: Morpho Q1 2026
More from Q1 2026:
“There is a structural shift in how institutions interact with DeFi, and the growth of some of the early curators alongside the emergence of new curators coming from a more traditional finance background is welcomed.”
“The shift toward tokenized asset volume, which nearly tripled QoQ to $224.86m, represents an intentional strategic direction.”
“The key signal is that capital became more productive, not less. While TVL declined alongside broader market deleveraging, fee generation remained nearly flat.”
If you're evaluating how to formalize your project's data and reporting strategy, get in touch.
Platform updates
Listed Noon, a stablecoin issuer and yield protocol that issues USN, a USD-pegged stablecoin, and sUSN, a yield-bearing staked variant that generates returns by rotating collateral across multiple delta-neutral strategies.
Listed Kinesis Gold (KAU) and Kinesis Silver (KAG) on Ethereum, two tokenized commodities backed by physical gold and silver.
Added 293 yield-bearing tokens to the Asset APY metric, including Aave and Morpho lending tokens and liquid staking tokens such as wstETH (Lido) and weETH (Ether.fi).
Added daily, weekly, and monthly Agentic asset sender metrics, measuring the number of unique autonomous agents transacting onchain via the x402 protocol.
Added 26 projects to the Cardano app ecosystem, including DeltaDeFi, Genius Yield, and MuesliSwap.
Interested in getting listed? Read more here.
Tokenized assets on Token Terminal
As yield-bearing assets gain traction onchain, Token Terminal's coverage of Tokenized assets has grown to 3,325 assets with a combined market cap of $338.2B: stablecoins ($302.4B), tokenized funds ($29.6B), tokenized commodities ($5.0B), and tokenized stocks ($1.1B).
The dataset is filterable by issuer, reference asset, market sector, and chain, making it easy to track which assets are gaining ground across each category.
For example, the 5 fastest-growing U.S. T-bill funds by market cap (30d):
If you're a tokenized asset issuer and your product isn't listed yet, get in touch.