Tokenized Treasuries Explode to $7.4B as Crypto Traders Flee Stablecoins for Real Yield

Crypto’s latest obsession? Tokenized Treasuries are eating stablecoins’ lunch—and the numbers don’t lie.

The Great Yield Migration

With $7.4 billion now parked in tokenized government debt, traders are ditching sterile stablecoin positions for something Wall Street thought it monopolized: risk-adjusted returns. Who knew blockchain could make T-bills sexy?

DeFi Grows Up (Sort Of)

Forget memecoins—this is institutional-grade demand wrapped in crypto’s signature volatility. Even the most cynical trad-fi bros can’t ignore the irony: ‘safe’ yields now flow through the very tech they spent years dismissing.

The Punchline?

When your ‘stable’ dollar-pegged tokens can’t compete with the US government’s IOU-on-a-blockchain, maybe it’s time to admit crypto’s maturing—or that traditional finance left yield on the table for decades. Oops.

Tokenized treasuries spell bad news for stablecoin issuers

For stablecoin issuers like Circle and Tether, this trend poses a significant risk. Issuers earn revenue by holding Treasuries as collateral and collecting interest payments themselves.

If outflows from stablecoins into tokenized Treasuries continue, issuers may lose a key revenue source. Additionally, they could be pressured to offer yields on their own stablecoins to compete.

Still, despite the rising interest in tokenized Treasuries, demand for stablecoins is growing. Specifically, stablecoin supply has been steadily increasing since the start of this year, rising from $2.5 billion in January of 2025 to $255 billion in July of 2025.