Tokenized U.S. Treasury Notes Surpass $1 Billion Milestone on Blockchains

In a significant milestone for the cryptocurrency market, the value of tokenized U.S. Treasury notes has surpassed $1 billion on various public blockchains. This surge in tokenization highlights the growing adoption of blockchain technology by traditional financial institutions. Investment firm Franklin Templeton has taken the lead, tokenizing $360.1 million in assets through its Franklin OnChain U.S. Government Money Fund. Additionally, PayPal's PYUSD stablecoin has experienced a decline in circulation while SushiSwap plans to implement a "Labs model" and the SEC has delayed the approval of Bitcoin ETF options on the NYSE.

Tokenized Treasury Notes Surpass $1 Billion Milestone on Public Blockchains

The tokenization of U.S. Treasury notes, a significant development in the cryptocurrency market, has reached a notable milestone, with a total value exceeding $1 billion across numerous public blockchains. This trend reflects the growing adoption of blockchain technology by traditional financial institutions.

Data compiled by 21.co and Dune Analytics indicates that tokenized government securities are now distributed across a diverse range of 17 products, primarily based on the Ethereum, Polygon, and Stellar networks.

Franklin Templeton Leads the Charge

Investment firm Franklin Templeton has assumed a leading role in this arena, having tokenized over $360.1 million in assets through its Franklin OnChain U.S. Government Money Fund, leveraging both the Polygon and Stellar blockchains.

Paul Wong, Director of Product, CBDCs, and Institutions at the Stellar Foundation, attributes the surge in tokenized treasuries to an increasing awareness among asset issuers of the business potential inherent in blockchain technology.

"Blockchain is here to stay and is the future," Wong asserts. "We anticipate exponential growth in tokenization over the next few years."

Stellar Blockchain Emerges as Tokenization Hub

Stellar's blockchain has established itself as a prominent player in the tokenization space. Tokenized securities constitute the most significant asset class on the network, with a total tokenized market cap exceeding $430 million as of late March.

PayPal Stablecoin Faces Circulation Decline

In a contrasting development, PYUSD, PayPal's stablecoin, experienced a sharp 38% decline in circulation during March, reaching a level of $188.5 million. This reversal follows the stablecoin's initial surge in early 2024, which witnessed its market value doubling within a month by mid-January.

According to CoinGecko data, PYUSD's market capitalization has been on a downward trajectory since late February despite the early gains. It reached an all-time high of $312 million on February 26. As of March 29, the PYUSD Treasury held $14.9 million in U.S. Treasury bonds.

SushiSwap Embraces "Labs Model"

Decentralized exchange SushiSwap has received positive feedback from its community to transition to a less decentralized "Labs model." In a preliminary vote, over 62% of voters approved this shift, which will result in the creation of Sushi Labs, an autonomous entity responsible for overseeing the ecosystem's administrative, technical, and operational aspects.

Under the proposed structure, token holders would retain influence over treasury allocations but would no longer participate in the decision-making process for operations. The new entity would also receive 25 million SushiSwap (SUSHI) tokens, currently valued at approximately $39 million, as well as future airdrops from affiliated protocols and partners.

Some members of the Sushi community have expressed concerns that this move signifies a departure from the project's decentralized principles.

SEC Delays Bitcoin ETF Options Approval

In a regulatory development, the Securities and Exchange Commission (SEC) has deferred a decision on whether to allow the NYSE to offer options for trading with ETFs that track Bitcoin. This decision impacts trading on the New York Stock Exchange for the Bitwise Bitcoin ETF, Grayscale Bitcoin Trust, and other Bitcoin trusts.

The SEC has also rejected Nasdaq's application to trade options on BlackRock's iShares Bitcoin Trust. May 29 is the next deadline for decisions regarding the NYSE's plan.

Conclusion

This week's Crypto Biz highlights the dynamic shifts and evolving landscape of the blockchain and cryptocurrency ecosystems. The SEC's delay in approving Bitcoin ETF options, SushiSwap's move to a "Labs model," and the rise in tokenization of traditional assets all demonstrate the industry's ongoing maturation.

Concurrently, the fluctuating fortunes of PayPal's stablecoin underscore the ongoing integration of blockchain technology