Tokenized US Treasuries Hit $8.6B Market Cap: Shift to Active Collateral on Bybit Deribit and DBS Repo Markets
Tokenized U. S. Treasuries have shattered expectations, surging to a staggering $8.6 billion market cap as of late October 2025. This marks a swift climb from $7.4 billion just a month prior, signaling not just growth but a fundamental pivot in how institutions wield these assets. No longer mere yield-bearing parking spots for idle capital, they’re morphing into dynamic collateral powering trades on platforms like Bybit and Deribit, while DBS pioneers repo markets in Asia.
BlackRock’s BUIDL fund anchors the rally at roughly $2.85 billion, with Circle’s USYC close behind at $866 million and Franklin Templeton’s BENJI at $865 million. This concentration underscores the gravitational pull of legacy finance titans into on-chain fixed income. For traders like me, who’ve cut teeth on Wall Street repo desks, this isn’t hype; it’s the logical endpoint of blockchain’s promise to unstick liquidity in Treasuries.
Exchanges Embrace Onchain Treasury Collateral
Bybit and Deribit are leading the charge, accepting tokenized money market funds (MMFs) as collateral for derivatives trading. Bybit’s late-September move to onboard QCDT, a DFSA-approved token backed by U. S. Treasuries, lets pro clients post it against positions while harvesting underlying yields. Deribit follows suit, integrating these assets despite liquidity quirks. This shift from passive holdings to active margin collateral slashes opportunity costs; why settle for bank deposits at sub-5% when you can collateralize BTC perps at Treasury rates?
Strategically, this levels the playing field. Crypto exchanges, long starved of high-quality collateral, now tap a $8.6 billion pool that’s battle-tested in traditional finance. Haircuts remain higher than vanilla repo- think 5-10% discounts versus 2% for physicals- owing to redemption windows and secondary market thinness. Yet, as volumes scale, these frictions erode. I’ve seen similar teething pains in early ETF launches; patience pays.
DBS Unlocks Tokenized Repo Markets
Singapore’s DBS Bank is rewriting the script for banks, listing Franklin Templeton’s sgBENJI on its Digital Exchange for trading and lending alongside Ripple’s RLUSD. More crucially, DBS pilots sgBENJI as collateral for repo and credit lines, embedding tokenized MMFs into core financing ops. This isn’t experimentation; it’s infrastructure build-out. In repo-heavy Asia, where collateral velocity is king, on-chain Treasuries could turbocharge tri-party agreements.
Swift-Chainlink Bridge Paves Institutional Path
Behind the scenes, Swift, Chainlink, and UBS Tokenize ran a pilot syncing ISO 20022 messages to blockchain smart contracts for fund subs/redemptions. This isn’t sci-fi; it’s plug-and-play for banks’ legacy systems, triggering on-chain actions via familiar formats. Amid tokenized US treasuries 2025 boom, such bridges dissolve silos between TradFi rails and DeFi primitives.
Regulatory hurdles loom- U. S. rules tether most funds to Qualified Purchasers- yet CFTC’s Tokenized Collateral Initiative hints at clarity. My take: institutions won’t wait. With $8.6 billion already live, the flywheel spins toward intraday collateral reuse across borders. DBS tokenized repo markets exemplify this; pair it with exchange adoption, and you’ve got onchain treasury collateral as the new standard.
Traders posting onchain treasury collateral on Bybit or Deribit face these realities head-on. Redemption delays- often T and 1 or worse- force conservative haircuts, sometimes double traditional repo levels. Secondary markets, while improving, lack the depth of SOFR-linked physicals. Yet this is evolution, not endpoint. As issuers like BlackRock streamline NAV calculations and redemptions, liquidity premiums will compress. I’ve managed enough collateral disputes on prime brokerage desks to know: friction fades with scale.
Strategic Edges in Tokenized Collateral Markets
For fixed income desks eyeing tokenized US treasuries 2025, the play is clear. Pair BUIDL or BENJI with perps on Deribit for yield-enhanced leverage, or lend sgBENJI on DBS for repo spreads. Returns stack: underlying Treasury coupons plus basis trades against futures. In volatile crypto winters, this flight-to-quality shines- institutions rotate from LSTs into tokenized MMFs without exiting chains.
DBS tokenized repo markets add another layer. By collateralizing sgBENJI against RLUSD loans, the bank fuses stablecoin efficiency with Treasury safety. Asian desks, squeezed by CNH funding costs, gain a 24/7 alternative to LCH or JSCC clearing. Globally, this previews tri-party repos on-chain, where collateral mobility rivals FX swaps.
Swift Chainlink UBS tokenized funds pilot accelerates the handoff. ISO 20022 messages now fire smart contracts for subs and redemptions, syncing bank GUIs with Ethereum or Polygon. No more API spaghetti; it’s native integration. Banks like UBS can report tokenized positions via MT5xx formats, easing compliance while unlocking $8.6 billion in live assets.
Risks persist- smart contract bugs, oracle fails, or custody hacks loom larger than in custodian-held bills. But audited protocols like BUIDL mitigate via Chainlink proofs and daily NAVs. For pros, the arbitrage is ripe: buy discounted tokens post-stress, redeem at par, pocket the spread. I’ve traded similar dislocations in agency MBS; tokenized versions amplify velocity.
DBS’s pilots prove banks lead, not follow. Listing sgBENJI alongside RLUSD normalizes hybrids, drawing HKMA oversight into tokenized flows. As pilots scale to intraday repos, collateral reuse ratios climb, echoing ECB’s TARGET2 efficiencies. Traders gain atomic swaps: post Treasury tokens, receive BTC exposure, settle in blocks.
The $8.6 billion milestone isn’t a peak; it’s base camp. With BlackRock scaling BUIDL past $3 billion soon, and exchanges iterating haircuts, tokenized MMFs embed as DeFi’s risk-free rate. Qualified Purchasers dominate now, but SEC evolutions could democratize access. My desk rule: position early in plumbing upgrades. How tokenized U. S. treasuries became the go-to collateral isn’t theory- it’s unfolding live. Adapt accordingly.
