The tokenization of U.S. Treasuries is unfolding rapidly and largely out of public view, but a closer look reveals a market that’s not nearly as decentralized as blockchain enthusiasts might hope. Today, just six entities control a staggering 88% of the entire tokenized Treasuries market, which now totals $5.4 billion. At the top of the heap is BlackRock’s BUIDL fund, which alone accounts for $2.5 billion-more than 40% of the market (of course). Trailing behind are Franklin Templeton’s BENJI with $707 million, Superstate’s USTB at $661 million, Ondo’s USDY and OUSG with $586 million and $424 million respectively, and Circle’s USYC at $487 million. Together, these six funds have created a financial oligopoly on-chain, mirroring the concentration of power that has long defined traditional finance.
How did we get here? The answer lies in a potent mix of institutional muscle, regulatory know-how, and investor demand for safety and yield. The big asset managers, BlackRock, Franklin Templeton, and their ilk, have the resources and legal expertise to navigate the complex regulatory environment, allowing them to launch compliant, scalable products that smaller upstarts simply can’t match. Meanwhile, the crypto world’s appetite for stable, yield-bearing assets has never been higher. In a market battered by volatility and uncertainty, tokenized Treasuries offer something rare: government-backed safety, daily dividends, and the promise of 24/7 liquidity. It’s no wonder that DeFi protocols like MakerDAO and Ethena Labs are pouring billions into these funds, further entrenching the dominance of the largest players.
BlackRock’s BUIDL fund is a case study in this new era of financial centralization on decentralized rails. Since January, BUIDL’s assets under management have nearly tripled, and the fund paid out a record $4.17 million in dividends in March alone. It’s now available on seven different blockchains, but the vast majority of its assets remain on Ethereum, underscoring the winner-take-most dynamic of the current market. The story is similar for the other major funds, which are rapidly expanding their reach but still rely on a handful of networks for liquidity and user activity.
This concentration of power has profound implications. On one hand, tokenization is delivering on its promise of efficiency: settlement times have shrunk from days to seconds, costs are dropping, and on-chain transparency is making it easier than ever to audit fund flows and holdings. On the other hand, the market’s centralization introduces new risks. If a handful of entities control nearly all tokenized government debt, any disruption, regulatory, technical, or otherwise, could have outsized effects on the broader ecosystem. Moreover, the very ethos of decentralization that underpins blockchain technology is being undermined by the same financial giants who have long dominated Wall Street.
In short, the tokenization of Treasuries is happening right under our noses, but it’s not the democratizing force many had hoped for. Instead, it’s a story of old power structures adapting to new technology, consolidating their grip on the future of finance even as they embrace the tools of decentralization. The revolution is real, but so is the risk that it ends up looking a lot like the system it was meant to replace.
