Tokenized US Treasuries Explained: How to Earn T-Bill Yields On-Chain
By Jorge Rodriguez — Tokenized Assets
How tokenized treasuries turn US government debt into on-chain yield
A side-by-side comparison of OUSG, BUIDL, USDY, and USTB
The risks, MiCA implications, and access paths on Solana
Why Idle Stablecoins Don't Earn What They Could
Hundreds of billions in stablecoins sit idle in DeFi wallets earning zero yield. Meanwhile, short-term **US Treasury bills** have been paying 4 to 5 percent annually for the better part of two years. **Tokenized US treasuries** close that gap by bringing **T-bill** exposure directly on-chain, accessible without brokerage accounts, bank transfers, or traditional custody arrangements. The market has grown fast. From under $1 billion in 2023, tokenized treasury products crossed $10 billion in total assets under management by early 2026. BlackRock, Ondo Finance, Franklin Templeton, and Superstate have all launched products. The infrastructure to hold, trade, and earn US government yields on a blockchain is now real and expanding across chains. This guide covers what tokenized US treasuries are, how they generate yield, which products exist, how to access them on Solana and other chains, what the risks look like, and how they compare to stablecoin savings. Readers tracking live RWA yields can use the [Lince Yields RWA tracker](https://yields.lince.finance/tracker/solana/category/rwa) to compare rates across Solana-native tokenized asset products in real time.
What Are Tokenized US Treasuries?
Tokenized US treasuries are digital tokens on a blockchain that represent ownership in a fund or custodied vehicle holding US government debt. The fund holds actual T-bills, Treasury notes, or other short-duration government securities. Each token represents a proportional share of that fund, and the yield flows through to token holders. The core mechanic is straightforward. An issuer purchases US Treasury bills through a regulated entity and holds them with an institutional custodian. The issuer then mints tokens on-chain, each backed by a corresponding share of the underlying government securities portfolio. When those T-bills earn interest, the yield is distributed to token holders through either a rebasing mechanism or through token price appreciation. **What they are not** These are not synthetic positions or algorithmic instruments. Tokenized US treasuries are not a new asset invented by the crypto industry. They are a custody and distribution layer placed on top of the world's most liquid and safest debt market. The underlying assets exist in the traditional financial system and are held by regulated custodians. This distinguishes them clearly from stablecoins. Stablecoins like USDC use US Treasury bills as reserves to back their peg, but those earnings stay with the issuer. USDC does not pay interest to holders; Circle keeps the yield. Tokenized treasury products do the opposite: the yield generated by the underlying government securities is passed directly to the token holder. For a detailed look at how yield-bearing stablecoin designs differ, see the guide on [T-bill backed stablecoins](/blog/stablecoins/t-bill-backed-stablecoins-explained).
How Tokenized Treasuries Generate Yield
The mechanics of yield delivery vary across products, but all tokenized treasury tokens earn from the same source: interest paid on US government debt. The two primary distribution models are rebasing and price appreciation.  **Rebasing tokens** In a rebasing model, the token's internal value per unit adjusts upward to reflect accrued interest, or the number of tokens in a holder's wallet increases over time. The token price stays close to $1, but the quantity or reference value grows. **OUSG** (Ondo Short-Term US Treasuries Fund) and **BUIDL** (BlackRock USD Institutional Digital Liquidity Fund) use this model. Each day, the protocol calculates the accrued interest on the underlying T-bill portfolio and adjusts token balances accordingly. **Price-appreciating tokens** In a **price appreciation** model, the token is minted at a fixed price, typically $1.00, and trades above that price over time as yield accrues. If you mint one **USDY** (Ondo US Dollar Yield Token) at $1.00 today, it may trade at $1.05 twelve months later, with that $0.05 representing accumulated yield. The token quantity stays fixed; the value per token rises. **USTB** (Superstate Short Duration US Government Securities Fund) follows the same structure. Both models produce equivalent economic outcomes for the holder. The practical difference is composability. **Rebasing** tokens require protocols to account for changing wallet balances. Price-appreciating tokens behave more like standard SPL or ERC-20 tokens and integrate more cleanly with some DeFi infrastructure. Yields track short-term government bond rates, which are set by the Federal Reserve's policy rate. Management fees from issuers typically range from 0.15% to 0.50% annually, paid from the gross yield. Net yields available to holders in the current rate environment generally fall in the 4% to 5% range.
Key Tokenized Treasury Products Compared
Several institutions have launched tokenized treasury products, each with different access requirements, yield distribution mechanics, and chain availability. The five most significant by assets under management and DeFi presence are: **OUSG (Ondo Finance)** OUSG holds short-term US Treasury bills and uses a rebasing model. It is available on Ethereum and Solana. The fund is backed by BlackRock's own BUIDL as the primary holding vehicle. Access requires qualified purchaser status, meaning investors must meet minimum net worth or investment thresholds depending on jurisdiction. **USDY (Ondo Finance)** USDY is Ondo's dollar yield token designed for non-US investors. It uses a price-appreciating model and carries no minimum investment requirement. USDY is available on Ethereum, Solana, Mantle, and several other chains, making it one of the most accessible tokenized treasury products for retail DeFi participants globally. **BUIDL (BlackRock / Securitize)** BUILD is the BlackRock USD Institutional Digital Liquidity Fund, the largest tokenized treasury product by assets under management, with over $1.7 billion at time of writing per [RWA.xyz data](https://app.rwa.xyz/treasuries). It is Ethereum-native and primarily targets institutional investors with substantial minimum investment requirements. BUIDL uses a rebasing model and holds a diversified portfolio of US government securities. **USTB (Superstate)** USTB is Superstate's Short Duration US Government Securities Fund. It uses a price-appreciating model and is available on Ethereum and Solana. Like OUSG, it is restricted to qualified purchasers. Superstate has been actively expanding its Solana presence through the Opening Bell platform. **sUSDT (Tether)** **sUSDT** is yield-bearing staked USDT by Tether. It sits at the edge of the tokenized treasury category: the underlying reserves include T-bills, but the product functions more like a yield-bearing stablecoin wrapper than a pure treasury fund. Availability and regulatory status under MiCA in Europe may be affected by existing regulatory pressure on USDT itself. | Product | Issuer | Yield Model | Approx. Yield | Chains | Access | |---|---|---|---|---|---| | OUSG | Ondo Finance | Rebasing | ~4.5% | Ethereum, Solana | Qualified purchasers | | USDY | Ondo Finance | Price appreciation | ~4.3% | Ethereum, Solana, Mantle | Non-US, no minimum | | BUIDL | BlackRock / Securitize | Rebasing | ~4.5% | Ethereum | Institutional | | USTB | Superstate | Price appreciation | ~4.5% | Ethereum, Solana | Qualified purchasers | | sUSDT | Tether | Yield-bearing wrapper | ~4.0% | Ethereum, Tron | Broad access | Yields are approximate and subject to change with Federal Reserve policy. Verify current rates directly with each issuer before making allocation decisions. 
Where Tokenized Treasuries Trade On-Chain
The tokenized treasury market spans multiple chains, with Solana emerging as a particularly accessible venue due to low transaction costs and deep protocol integrations. **Solana** Ondo Finance has deployed USDY and OUSG natively on Solana. Both tokens integrate with the broader Solana DeFi ecosystem. Kamino Finance has supported tokenized asset collateral, and Superstate's Opening Bell platform is building Solana-native distribution for USTB. Solana's transaction costs make small allocations practical: a $500 position earning around $22 annually does not get eroded by gas fees the way it would on Ethereum mainnet. **Ethereum** Ethereum remains the largest chain by tokenized treasury TVL. BUIDL, OUSG, USDY, and USTB all exist on Ethereum, and secondary market liquidity for these tokens is deepest there. For institutional participants already operating on Ethereum infrastructure, this remains the primary access path. **Other chains** Mantle has attracted USDY liquidity through incentive programs. Arbitrum and Base are seeing growing tokenized asset activity. The multi-chain expansion reflects demand from DeFi communities that prefer lower fees than Ethereum mainnet while maintaining composability with lending and LP protocols. **Secondary markets** Most tokenized treasury tokens have primary redemption channels through the issuer, with T+1 to T+3 settlement windows. For faster liquidity, DEX pools on Solana and Ethereum allow holders to swap into stablecoins without going through the issuer redemption process. Liquidity depth varies by token and chain, and secondary market slippage should be factored into any liquidity planning for time-sensitive exits.
Tokenized Treasuries vs. Stablecoin Savings
The comparison between holding idle USDC or USDT versus deploying into a tokenized treasury product comes down to one fundamental difference: stablecoins do not pass yield to holders; tokenized treasuries do.  **Where stablecoin yield comes from** When you deposit USDC into a lending protocol on Solana, the yield you earn is not T-bill income. It is interest paid by crypto borrowers who want leverage. That rate is variable and unpredictable. During bull markets with heavy leverage activity, stablecoin lending rates can reach 15% or more. During quiet or bear market periods, the same deposits can earn under 2%. The rate is entirely driven by supply and demand within the protocol, with no link to any external benchmark. **Where tokenized treasury yield comes from** A tokenized T-bill position earns directly from interest on US government debt. The Federal Reserve's policy rate sets the reference point. In the current environment, that means a stable 4 to 5 percent regardless of whether crypto markets are active or quiet. When a risk-off event compresses DeFi lending yields, the T-bill rate continues accruing at the same pace. **The practical trade-off** Stablecoins deployed in DeFi have higher upside and more composability. You can stack them in lending protocols, use them as LP collateral, and withdraw without a redemption window. Tokenized treasuries offer a more stable yield floor with lower protocol risk, but they require KYC for most primary access paths and settlement takes days rather than minutes. Both have a role. Stablecoins are the liquidity and composability layer. Tokenized treasuries are the baseline yield layer. Investors who hold a portion of their stablecoin allocation in tokenized treasuries alongside DeFi positions for active yield tend to get more consistent portfolio performance across market cycles. For investors comparing current rates, the [Lince Yields stablecoin tracker](https://yields.lince.finance/tracker/solana/category/stablecoin) shows live lending and yield rates for Solana-native stablecoin products alongside RWA alternatives. For a deeper framework on evaluating the two categories across risk, liquidity, and return, see [RWA yield vs DeFi yield](/blog/tokenized-assets/rwa-yield-vs-defi-yield-comparison).
MiCA Considerations for European Holders
The European Union's **Markets in Crypto-Assets Regulation**, known as **MiCA**, became fully applicable in December 2024, with transitional periods running through July 2026. The regulation introduces a classification framework that affects how tokenized treasury products can be offered to EU-based investors. **How tokenized treasuries might be classified** Under MiCA, tokens that reference the value of an asset or basket of assets may qualify as **asset-referenced tokens** (ARTs). A tokenized fund that holds US T-bills and issues tokens representing shares in that fund could fall under this classification depending on how the issuing structure is designed and how regulators interpret the specific product. ARTs require the issuer to obtain authorization from the relevant national competent authority in an EU member state. Unauthorized offering of ARTs to EU residents would be prohibited once transitional periods expire. **What this means in practice** Not every tokenized treasury product has obtained or applied for MiCA ART authorization. Products like USDY, which target non-US investors broadly, may include EU residents in their distribution, but whether the product structure constitutes an ART under MiCA requires legal analysis specific to each product's design. For EU-based DeFi investors, the practical checklist: verify whether the issuer has addressed MiCA compliance for their specific product, confirm whether your jurisdiction falls within the issuer's authorized distribution scope, and check whether the transitional period still applies. The [ESMA MiCA overview](https://www.esma.europa.eu/esmas-activities/digital-finance-and-innovation/markets-crypto-assets-regulation-mica) provides the official regulatory framework and timeline. This section is informational only and does not constitute legal or financial advice. Consult a qualified legal professional before making allocation decisions as a European investor.
Risks of Tokenized Treasuries
Tokenized US treasuries carry significantly less credit risk than most DeFi strategies because the underlying asset is US government debt, the closest approximation to a risk-free asset in global finance. That does not make them risk-free. There are distinct risk categories every investor should evaluate before allocating. **Redemption risk** Most products have **redemption windows** of T+1 to T+3. You cannot withdraw instantly. If you need liquidity faster than the window allows, you are dependent on secondary market DEX pools, which can carry price slippage and thin depth. Treat these as medium-liquidity instruments rather than instantly liquid positions. **Issuer and custodian risk** The token is only as sound as the institution holding the underlying T-bills. If the issuer becomes insolvent, redemptions may be delayed while legal proceedings run. If the custodian faces operational issues, the chain of custody for underlying securities becomes uncertain. This is counterparty risk that exists independently of the quality of US government debt itself. **Smart contract risk** Tokenized treasuries live on-chain as smart contracts. A bug or exploit in the token contract, the distribution mechanism, or any integrated DeFi protocol that holds the token could affect the value of your position. Look for products with audited contracts and multisig governance before allocating. **Regulatory risk** Changes in regulation, including MiCA in Europe or SEC enforcement actions in the US, could restrict access to specific products or require structural changes affecting how yield is distributed or how the token can be traded. This is a legitimate risk category that should not be dismissed, particularly in jurisdictions where clarity is still developing. **Yield compression** Tokenized treasury yields move with the Federal Reserve's policy rate. If the Fed cuts rates significantly, yields drop in lockstep. These are variable-rate instruments tied to short-term government debt, not fixed-income products. A product yielding 4.5% today might yield 2.5% during a rate-cutting cycle. For a broader breakdown of risk categories across on-chain yield instruments, see [DeFi yield risks explained](/blog/risk-management/defi-yield-risks-explained) and the [stablecoin risk tiers](/blog/stablecoins/stablecoin-risk-tiers) framework as comparative context.
Who Should Consider Tokenized Treasuries?
Tokenized treasuries are not a universal instrument. They fit certain investor profiles and portfolio contexts better than others. **Well suited for:** • DeFi-native investors holding idle stablecoins who want to earn a stable baseline yield without leaving the chain. A tokenized T-bill position earns the **risk-free rate** passively, without active management or protocol monitoring. • Institutions and DAOs that need compliant on-chain treasury management. Regulated issuers provide auditable custody with KYC-verified access, which matters for entities with legal obligations around asset management. • Investors building a stable yield floor to balance a higher-risk DeFi allocation. The T-bill rate provides a reliable baseline that holds through crypto market cycles when DeFi yields compress. • Long-duration holders who do not need instant liquidity. Redemption windows are not a constraint if your investment horizon is measured in weeks or months rather than hours. **Less suited for:** • Investors seeking high yield. DeFi strategies can significantly outperform the risk-free rate when market conditions favor leverage. Tokenized treasuries are a floor, not a ceiling. • Investors who need constant liquidity. If you might need your capital back within hours, the redemption window creates friction that lending protocol deposits do not. • US investors looking at non-US products. USDY, for example, explicitly excludes US persons from participation due to securities law constraints. The ideal role in a portfolio is as a stable allocation alongside more active DeFi yield strategies. The T-bill rate provides a reliable baseline. DeFi provides performance upside when conditions are favorable. Holding both across market cycles tends to produce more consistent risk-adjusted returns than either approach alone.
Conclusion
Tokenized US treasuries bring the world's most liquid and safest debt market on-chain. The market has crossed $10 billion in assets and is growing as institutional issuers expand chain coverage and DeFi protocols deepen integrations with these products. For DeFi investors, the core use case is straightforward. Idle stablecoins earning nothing can instead earn 4 to 5 percent annually by holding a tokenized T-bill position. The yield is not speculative and not dependent on DeFi market conditions. It tracks the Federal Reserve's policy rate and holds through crypto market cycles. The risks are real but manageable. Redemption windows, issuer counterparty exposure, and smart contract surface area are all factors to evaluate before allocating. European investors should monitor MiCA authorization status for specific products as the July 2026 transitional deadline approaches. The market is still early enough that access paths vary, product structures differ meaningfully, and regulatory clarity continues to develop. Doing the work to understand each product before allocating is time well spent. Investors comparing tokenized treasury yields alongside stablecoin and DeFi yield strategies on Solana can explore the full yield landscape at [Lince Yields](https://yields.lince.finance/tracker).
FAQ
### What are tokenized US treasuries? Tokenized US treasuries are digital tokens on a blockchain that represent ownership in a fund holding US government debt such as T-bills. The fund buys the bonds through a regulated entity, and each token is a share of that fund. Yield from the underlying government securities is passed through to token holders rather than kept by the issuer. ### How much yield do tokenized treasuries pay? Yields currently range from approximately 4% to 5% annually, tracking short-term US government bond rates net of management fees. The exact rate depends on the product and the prevailing Federal Reserve policy rate. If the Fed cuts rates, yields decline accordingly since these are variable-rate instruments. ### Are tokenized treasuries safe? They carry minimal credit risk because the underlying asset is US government debt. However, they are not risk-free. Issuer and custodian risk, smart contract risk, redemption delays, and regulatory uncertainty all apply. They carry substantially lower risk than most DeFi yield sources but are not equivalent to holding cash in an insured bank account. ### Can I buy tokenized treasuries on Solana? Yes. Ondo Finance offers both USDY and OUSG natively on Solana. Superstate has expanded its Solana presence through the Opening Bell platform with USTB. Solana's low transaction fees make smaller allocations practical compared to Ethereum mainnet, where gas costs can meaningfully reduce returns on smaller positions. ### How are tokenized treasuries different from stablecoins? Stablecoins like USDC are pegged to $1 and use Treasuries as reserve backing, but they do not pass yield to holders. The issuer keeps the interest earned on those reserves. Tokenized treasuries pass the yield directly to token holders. Both use US Treasuries in their underlying structure, but the economic design and who captures the yield is entirely different. ### Do European investors face restrictions under MiCA? Potentially. Depending on how a product is structured, it may qualify as an asset-referenced token under MiCA, requiring issuer authorization in the EU. Availability depends on whether each issuer has obtained MiCA compliance for their specific product. The transitional period ends in July 2026, after which unlicensed issuers may be restricted from offering products to EU-based investors. ### What happens to tokenized treasury yields if interest rates fall? Yields decline in lockstep with the Federal Reserve's policy rate. These are variable-rate instruments tied to short-term government debt, not fixed-rate bonds. A significant rate-cutting cycle would compress yields proportionally, which is a meaningful risk for investors relying on tokenized treasuries as a stable income source over multi-year horizons. ### Can tokenized treasuries be used as collateral in DeFi? Some protocols accept them. BlackRock's BUIDL and Ondo's OUSG have been integrated as collateral in select lending markets. Kamino Finance on Solana has supported tokenized asset collateral. Composability is expanding but remains limited compared to standard stablecoins, which have deeper DeFi integration across more protocols and chains.