How tokenized treasuries & money market products are leading adoption

1) Executive framing: why cash-equivalents are the tip of the spear

The most credible evidence of institutional adoption in real-world-asset (RWA) tokenization is concentrated in cash-equivalents—namely tokenized U.S. Treasuries and tokenized money-market fund (MMF) shares. These instruments align with existing legal wrappers, custody models, and daily NAV workflows, which makes them operationally compatible with bank and corporate treasury requirements (sweep programs, intraday liquidity, collateral mobility). Current telemetry underscores this leadership: as of Oct 23, 2025, tokenized Treasuries total ≈ $8.40 billion across 52 products held by ~52.5k addresses, and total on-chain RWA value stands at ≈ $34.52 billion across 227 issuers and ~494k holders. (RWA.xyz)

From a policy perspective, central-bank research frames tokenization as an infrastructure upgrade rather than a novel asset class. The BIS Annual Economic Report 2025 argues that tokenized platforms with central-bank reserves, commercial-bank money, and government bonds at the core can support next-generation settlement and collateral markets—precisely the design space where MMFs and Treasuries sit. (Bank for International Settlements)

Finally, production integrations in 2025 (e.g., BNY Mellon’s LiquidityDirect connecting to Goldman Sachs’ GS DAP to record MMF share ownership on-chain) document a compliance-first, closed-loop approach: investors subscribe/redeem through a regulated platform while a blockchain registry mirrors share records—improving reconciliation and collateral mobility without abandoning transfer-agent and custodian controls. (Goldman Sachs)

2) What counts as “tokenized cash-equivalents”: taxonomy & design

Taxonomy. In practice, two architectures dominate:

1. Tokenized MMFs (fund share tokens). The fund remains a regulated ’40-Act/UCITS vehicle; the share register is mirrored on-chain, and subscriptions/redemptions are processed via the transfer agent/administrator. Example: Franklin Templeton’s FOBXX publishes daily holdings and pricing while maintaining an on-chain register (Stellar/Polygon). (Franklin Templeton)

2. Tokenized Treasuries (note/SPV structures). An SPV (or note program) holds short-duration U.S. government securities; investors receive permissioned tokens representing a claim on the vehicle. These structures typically offer transparent holdings, periodic distributions, and a documented redemption path. Aggregate market data is tracked publicly (see §3). (RWA.xyz)

   
   

Control layer. Institutions overwhelmingly employ permissioned token standards—notably ERC-3643—to encode investor eligibility (KYC/AML), whitelist transfers, pause/freeze controls, and upgrade governance on EVM networks. Such standards are designed to map on-chain state to off-chain legal rights (fund shares, notes) and to interoperate with transfer-agent records. (erc3643.org)

Legal framing. Authoritative legal commentary (e.g., Katten 2025) stresses that the token is not the right—the wrapper is. Enforceability is anchored in the fund/note/SPV and its transfer-agent records; tokens function as digitized share/claim representations that must reconcile with traditional books and records. (Katten)

3) Data check: growth, holders, dispersion (grounding claims in telemetry)

A data-driven view helps separate adoption from narrative:

• Tokenized Treasuries: $8.40 B TVL, 52 assets, 52,544 holders, with a +1.42% 7-day TVL change at the latest reading. This category includes SPV/note-based products and cash-equivalent wrappers that provide frequent disclosures and defined redemption mechanics. (RWA.xyz)

• Global RWA overview: $34.52 B total on-chain RWAs (ex-stablecoins shown separately), 494,337 holders, 227 issuers. These figures provide the scale baseline against which MMFs/Treasuries can be benchmarked. (RWA.xyz)

• Institutional production signals: In July 2025, BNY Mellon and Goldman Sachs launched the LiquidityDirect ↔ GS DAP integration to tokenize MMF share records for institutional clients—reported across primary and trade media, corroborating the shift from pilot to controlled production. (Goldman Sachs)

  
  

Interpretation. Cash-equivalents lead because daily NAVs, transparent portfolios, issuer-facilitated redemptions, and qualified custody compress settlement windows (toward T+0/T+1) and improve collateral mobility—the exact properties BIS envisions for tokenized platforms centered on bank money and government bonds. Secondary trading depth remains venue-dependent, but the subscription/redemption rail already delivers functional liquidity for treasurers. (Bank for International Settlements)

4) Case studies (production, not pilots)

BlackRock × Securitize — BUIDL (USD Institutional Digital Liquidity Fund)

BlackRock’s BUIDL has become the canonical example of a regulated, permissioned, tokenized cash-equivalent. Issued via Securitize, BUIDL distributes income on-chain, restricts transfers to whitelisted, qualified purchasers, and has expanded issuance across multiple public chains (e.g., Ethereum, Arbitrum, Avalanche, Optimism, Polygon, Solana, Aptos) to align distribution with operational preferences of institutional counterparties. Public reporting in Q3–Q4 2025 documents both rapid AUM accretion (hundreds of millions in weeks) and multichain availability, while industry profiles (e.g., Messari) detail the fund’s design objective—blockchain-native liquidity and yield in USD under a traditional legal wrapper. (Crypto Briefing)

Franklin Templeton — FOBXX (OnChain U.S. Government Money Fund) and EU UCITS

FOBXX maintains an on-chain share register (Stellar/Polygon) while preserving a ’40-Act fund structure, with daily holdings, pricing, and documents accessible to investors—illustrating the hybrid record-keeping model most institutions require. In 2025 Franklin extended the architecture to Europe with a Luxembourg-domiciled, fully tokenized UCITS share class to support institutional distribution within the EU framework. (Franklin Templeton)

UBS Asset Management — uMINT (Tokenized USD Money-Market Investment Fund)

UBS AM launched uMINT on Ethereum in November 2024, distributing through authorized partners and positioning the product as a money-market investment operated on DLT under bank-grade oversight. 2025 collateral initiatives reference uMINT in the context of exchange and prime-broker integrations for institutional collateral workflows. (United States of America)

BNY Mellon × Goldman Sachs — LiquidityDirect ↔ GS DAP (tokenized MMF share records)

On July 23, 2025, BNY and Goldman launched a production integration whereby subscriptions, redemptions, and safekeeping of tokenized MMF share classes occur on BNY’s LiquidityDirect, with GS DAP maintaining the on-chain record of customer ownership—an explicit, bank-grade closed-loop design for institutional clients. The collaboration is documented in Goldman’s press release, BNY’s technical factsheet, and trade/financial media. (Goldman Sachs)

Why these matter: Each case demonstrates regulated wrappers, permissioned token controls, machine-readable NAV/disclosures, and an issuer-facilitated liquidity path—the combination institutions require for treasury and collateral operations.

5) Why these products fit bank & corporate treasury today

Operational liquidity & working-capital efficiency. Tokenized MMFs and short-duration Treasuries support T+0/T+1 subscription/redemption cycles and programmatic sweeps, improving end-of-day and intraday cash positioning without abandoning transfer-agent controls. Bank-operated rails (e.g., LiquidityDirect/GS DAP) provide auditable ownership records while interfacing with existing treasury systems. (BNY)

Collateral mobility & rehypothecation-adjacent workflows. Banks are wiring token rails to collateral systems. JPMorgan’s Kinexys / Tokenized Collateral Network (TCN) enables clients to transfer collateral ownership on-chain without moving assets in the underlying ledgers, increasing utilization while keeping traditional custody and segregation—exactly the property corporate treasurers and prime brokers require for intraday credit lines and margining. (JPMorgan Chase)

Data and control symmetry. Cash-equivalent products provide daily NAVs and transparent portfolio disclosures; token contracts embed KYC/whitelisting, pause/freeze, and upgrade governance; and transfer-agent records remain authoritative—delivering the control environment auditors, boards, and regulators expect. This design mirrors BIS/IOSCO guidance that positions tokenization as market-infrastructure modernisation centered on bank money and government securities. (The Block)

Aggregation in live market telemetry. Sector dashboards corroborate adoption at scale: Tokenized Treasuries ≈ $8.40 B across 52 products and ~52.5k holders, nested within ~$34.5 B of on-chain RWAs overall as of Oct 23, 2025—useful baselines for treasury policy reviews and board reporting. (RWA.xyz)

6) Market microstructure: how liquidity actually works

Issuer-facilitated liquidity dominates. For securities-like RWAs, primary rails (subscriptions/redemptions) remain the principal liquidity mechanism; peer-to-peer secondary trading is gated to registered venues (ATS/RFQ) or bank platforms. The LiquidityDirect ↔ GS DAP model exemplifies this: investors operate within a permissioned venue, with trade lifecycle, custody, and ownership records consolidated for audit and collateral use. (Goldman Sachs)

Pricing signals via NAV, not AMMs. Tight reference pricing arises from daily NAV and portfolio-level disclosure, not automated market makers. This reduces discount/premium volatility compared with illiquid RWA categories where marks are infrequent. RWA.xyz provides corroborating, product-level metrics (AUM, holders, assets) to benchmark dispersion and flows. (RWA.xyz)

Venue structure and compliance. Secondary turnover depends on regulated venues (e.g., Securitize Markets/ATS), bank platforms, and RFQ workflows rather than public AMMs, reflecting securities-law constraints and institutional best practices. Integration with qualified custody ensures reconciliation between on-chain registers and custodian books, which is a prerequisite for collateral eligibility and internal risk approval. (Goldman Sachs)

Collateral-aware settlement. Banks are converging on interoperable, permissioned settlement where tokens can be pledged, un-pledged, and substituted intraday without full asset movement—TCN/Kinexys being the most visible example in production communications. This architecture privileges control and finality over open, retail liquidity—consistent with 2025 institutional adoption patterns. (JPMorgan Chase)

7) Risks & constraints: what institutions must navigate

Despite the momentum for tokenised treasuries and money-market products, institutional adoption remains bounded by several structural risks and operational constraints.

A. Legal and regulatory perimeter

Tokenised MMFs and Treasury products still operate under traditional fund or note wrappers. As highlighted by the Federal Reserve Bank of New York’s Liberty Street Economics study, the majority of tokenised investment funds are money-market funds or similar cash-equivalent vehicles, not full replacements of classic asset categories. (Liberty Street Economics)Regulators remain cautious: while tokenisation offers settlement and transparency benefits, it does not change the underlying investor-eligibility or redemption constraints. For example, tokens are often sold only to qualified purchasers/accredited investors and transfers remain highly restricted.Secondary-market trading is limited under existing securities laws, so many products rely on issuer-facilitated redemption rather than open peer-to-peer exchange. News coverage by Financial Times noted that tokenised Treasury/short-duration products surged +80 % in early-2025, yet many still function within constrained frameworks, not general circulation. (Financial Times)

B. Liquidity and trading infrastructure

While custody and issuance of tokenised funds have matured, secondary liquidity remains a weaker link. The arXiv working paper “Tokenize Everything, But Can You Sell It?” finds that despite billions of dollars on-chain, most tokenised assets show low transfer frequency, long hold periods and minimal peer-to-peer trading. (arXiv)Given this, institutions must design for liquidity exits (issuer redemption, venue listing, collateral use) rather than assuming open-market trading. Liquidity risk remains a core deterrent.

C. Custody, data and reconciliation

Tokenised funds combine on-chain registers with off-chain asset wrappers (funds, SPVs, administrators). Institutions emphasise auditability: custody must be qualified, data must be machine-readable (e.g., NAV/holdings in CSV/JSON) and the on-chain ledger must reconcile with transfer-agent records.The divergence of token state, multiple chains, or bridges without strong controls introduces settlement, audit and regulatory risk.

D. Operational/settlement risk

Tokenised cash-equivalent products promise T+0/T+1 settlement, 24/7 liquidity, and programmatic sweeps. But achieving this requires robust infrastructure: real-time fund admin, smart-contract controls, transfer-agent integration, and reconciliation.Until these capabilities function at scale, tokenised funds may be restricted to day-end sweeps or internal institutional flows.

Bottom-line: Tokenised MMFs and treasuries are not frictionless. These designs work because they mirror existing infrastructure and controls; moving into less familiar assets will magnify risk. Institutions must build risk-aware tokenisation programmes.

8) Implementation blueprint for issuers & treasurers

For fund issuers, corporate treasury teams and institutional adopters, the following blueprint captures best practices distilled from 2024-2025 market launches and research.

Step 1: Legal wrapper & product definition

• Choose a regulated wrapper (e.g., U.S. Money Market Fund under the Investment Company Act, Luxembourg UCITS, or regulated note/SPV structure).

• Define investor eligibility (accredited, qualified purchasers) and transfer controls.

• Document redemption/exit mechanics and whether peer-to-peer trading will be permitted or controlled.

  
  

Step 2: Token architecture & controls

• Adopt permissioned token standards (e.g., ERC‑3643) that support whitelisting, transfer pauses, upgrade-governance.

• Anchor token ownership to the traditional register (transfer agent or fund admin) ensuring legal enforceability.

• Embed smart-contract logic for distributions, NAV updates, and where applicable, redemption execution.

  
  

Step 3: Data transparency & audit-readiness

• Provide machine-readable disclosures: daily/weekly NAV, holdings, fees, audit reports.

• Ensure custody provides attestations, proof-of-reserve (for underlying holdings) and fund-admin reconciliation documents.

• Implement reconciliation between on-chain ledger and off-chain books. As noted in Liberty Street Economics, shared ledger architecture can reduce reconciliation burden—but only if data is synchronized. (Liberty Street Economics)

  
  

Step 4: Settlement and venue integration

• Decide on primary settlement path: Is this an issuance/redemption only model or will you list on a regulated venue (ATS/RFQ)?

• Integrate with existing treasury/settlement systems for T+0/T+1 flows and intraday sweeps; examine how tokens will be used as collateral. For example, institutional pilots with BNY Mellon and Goldman Sachs target precisely this use-case. (Investopedia)

• Manage chain architecture: single authoritative ledger vs bridged chains; document upgrade/failure/resettlement plans.

  
  

Step 5: Treasury / collateral use-cases

• Map how the tokenised product will support corporate treasury: cash sweeps, collateral posting, margin/CVA reduction.

• Engage with custodians, prime brokers, and settlement networks to ensure tokens are accepted as collateral in repo/lending contexts.

• Measure and monitor exit paths: subscription/redemption cycle-time, internal/external collateral usage.

  
  

Step 6: Ongoing governance & control

• Establish audit and compliance protocols: SOC-1/2 reports, fund admin reviews, custodial attestations, regulatory reporting.

• Maintain upgrade governance and operational controls for smart-contracts, token mechanics, legal wrapper evolution.

• Monitor and report metrics for institutional adoption: issuer flows, liquidity turnover, holder dispersion, redemption performance.

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By following this blueprint, issuers and treasurers can build tokenised cash-equivalent products that meet operational, audit & regulatory standards, not just technology-proof statements.

9) KPIs that matter (beyond TVL)

To evaluate tokenised treasuries or money-market funds meaningfully, institutions should focus on operational and liquidity-oriented KPIs rather than headline supply numbers.

• Subscription/Redemption Cycle Time: Average time from investor submission to settlement/completion. Target: T+0 or T+1.

• Outstanding Token Turnover Ratio: Ratio of peer-to-peer or venue trades to total outstanding tokens. A low ratio may indicate illiquidity or redemption-only model.

• Holder Dispersion Index: Number of unique token-holding addresses, concentration metrics, and distribution across wallets. For example, RWA.xyz shows ~52.5k holders for the $8.4B tokenised-Treasury segment.

• NAV/Portfolio Disclosure Frequency & Format: Daily or weekly updates preferred; machine-readable formats (CSV/JSON) improve auditability.

• Collateral Usage Metrics: Number/value of tokens accepted as collateral in repo, margin or treasury sweeps; number of counterparties using such collateral.

• Venue Connectivity or Redemption Pathways: Number of regulated trading venues or broker-dealers; number of networks integrated for subscription/redemption; redemption flow size and frequency.

• Custody & Reconciliation Audit Frequency: Frequency of custodial attestations, proof-of-reserve updates, audit reports.

• Chains/Settlement Network Uptime: For tokens issued on blockchain, measure ledger uptime, smart-contract upgrade occurrences, bridge failures (if multichain).

  
  

These KPIs allow boards, audit committees and treasury desks to assess functional liquidity, operational readiness, and scalability potential of tokenised cash-equivalent vehicles.

10) Outlook 2025–2027: what to watch

Near term (2025-2026):

• Expansion of tokenised MMF share-classes from more fund managers and banks, with distribution to qualified global investors under wrappers like UCITS and Reg D/S.

• Increase in tailored institutional rails: more banks integrating token-based records and collateral posting (beyond pilot), more treasury desks adopting tokenised products for intraday liquidity.

• Refinement of data standards and audit controls: fund admins and custodians publishing machine-readable NAVs/holding files, standardised tokenised-asset disclosures gaining regulatory traction (e.g., through the World Economic Forum “Asset Tokenization in Financial Markets 2025” report). (World Economic Forum Reports)

  
  

Medium term (2026-2027):

• Growth of secondary trading venues for tokenised cash-equivalents, leading to improved turnover metrics and price-discovery beyond issuance/redemption models.

• Expansion of usage: tokenised MMFs and Treasuries become standard in corporate treasury toolkits, collateral ecosystems, and digital-asset liquidity programmes; some tokenised funds may become eligible for securities-lending and repo markets.

• Migration into “phase two” tokenisation: as cash-equivalent workflows mature, more complex assets (private credit, short-duration bonds, collateralised funds) will follow—supported by the infrastructure proven in the first wave. The Ripple-BCG study projects that tokenised assets could reach ~US$12 trillion by 2030, starting with Treasuries/MMFs. (investax.io)

  
  

Strategic imperatives for issuers & institutions:

1. Operational readiness over novelty: The path to scale lies in embedding tokenised products into existing treasury/money-management workflows, not simply building new products.

2. Liquidity mechanism design matters: Issuers must plan for redemption, collateral reuse, and venue listing from day one.

3. Data, custody, control frameworks define success: The winners will not be the first issuers alone—they will be those who integrate audit, compliance, interoperability and treasury utility into token design.

Final take-away: Tokenised treasuries and money-market funds are leading adoption not because they are novel, but because they fit the operational, legal and data frameworks of institutional treasury and asset-management workflows. The question for 2025–27 is no longer if, but how fast and how deep.(tokenised MMFs 2025; tokenised treasuries liquidity; institutional adoption treasury desks; tokenised collateral network; tokenised fund data standards)