Government securities

Market state

RWA.xyz put the distributed value of tokenised US Treasury products at $16.20bn on 25 July 2026, up 4.67% over the preceding 30 days, across 85 assets held by 62,940 addresses, with a trailing seven-day yield of 3.26%. The separately tracked non-US government debt category stood at $1.41bn on 24 July 2026, up 8.63% over 30 days across 24 assets and 10,008 holders.

Two methodology points matter. First, RWA.xyz splits "distributed" value (the claim itself is issued and transferable onchain) from "represented" value (a conventional holding with a blockchain record); represented value in the US Treasury category was only $91.15m on 25 July 2026, down 43.63% over 30 days, so the headline figure is a distributed-value series. Second, the figure is fund assets under management, not bond notional outstanding: a $2.61bn tokenised money-market fund holds Treasuries indirectly, and adding it to bond-issuance tallies double-counts.

Direct sovereign tokenisation remains at pilot scale. HM Treasury selected HSBC Orion as the platform for the UK's Digital Gilt Instrument pilot on 12 February 2026; HSBC said Orion had by then supported more than $3.5bn of digitally native bonds across sovereign and corporate issuers.

Market structure

The dominant wrapper is a regulated fund rather than a bearer bond token. An asset manager runs the strategy, an administrator strikes net asset value, and a transfer agent maintains the share register on a blockchain - Securitize for BUIDL, Franklin Templeton's own transfer agent for BENJI, Libeara for the ChinaAMC funds, Spiko for its euro and dollar bill funds. Subscriptions and redemptions happen at NAV against cash or a stablecoin, with the primary market still bound to the settlement calendar of the underlying bill market even where the token transfers around the clock.

Holder registers are permissioned. Transfers are restricted to whitelisted wallets, which is why $16.20bn of value sits with fewer than 63,000 addresses. Supply is mirrored across several networks for the largest funds, so per-chain balances are fragments of one register rather than independent pools.

Demand is concentrated in three uses: idle treasury cash for crypto-native firms, reserve assets for stablecoin and yield-bearing token issuers, and margin. The CFTC's tokenized collateral and stablecoins initiative and its digital assets pilot programme for tokenized collateral in derivatives markets are the main official-sector routes to the third use.

Risks

Concentration is the first-order risk: a handful of funds account for most of the value, and a small number of addresses hold most of each fund. A redemption request large enough to matter would be met from bill and repo markets that trade on conventional hours, so the token's continuous transferability does not extend to the primary market.

Other exposures: smart-contract and bridge failure on the mirrored multi-chain supply; divergence between secondary transfer prices and administrator-struck NAV; reliance on a single transfer agent as the authoritative register; and, where tokens are pledged as collateral, the untested question of how a lien on a whitelisted token is perfected and enforced in a default.

Yields are pass-through. The 3.26% trailing seven-day yield reported on 25 July 2026 falls with policy rates, and much of the demand for these products has been rate-driven rather than structural.

Regulatory treatment

In the United States these products are securities. Most are 1940 Act funds or Regulation D private placements sold to qualified purchasers; the token is a share class, not a new instrument. Two 2026 developments widened the plumbing: SEC staff granted no-action relief to the Depository Trust Company's tokenisation pilot in December 2025, and the SEC approved Nasdaq's rule change permitting trading of securities in tokenised form on 18 March 2026, limited to DTC pilot participants and requiring tokenised shares to carry the same CUSIP and rights as conventional ones.

On the collateral side, the CFTC launched a tokenized collateral and stablecoins initiative and then a digital assets pilot programme for tokenized collateral in derivatives markets.

In the European Union, tokenised fund units sit under UCITS or AIFMD, while trading and settlement venues use the DLT Pilot Regime. On 4 December 2025 the European Commission proposed raising the regime's issuance ceiling from €6bn to €100bn, adding a simplified tier capped at €10bn, extending eligibility to all MiFID II securities, removing the €500m market-capitalisation limit on tokenised shares, and moving authorisation and supervision of crypto-asset service providers to ESMA.

The United Kingdom is running sovereign tokenisation inside the Digital Securities Sandbox, with HM Treasury's DIGIT pilot mandated to HSBC Orion on 12 February 2026.