The recent surge in tokenizing U.S. Treasurys across different blockchains like Ethereum, Polygon, and Solana, exceeding $1 billion, has been significantly influenced by BlackRock's USD Institutional Digital Liquidity Fund.

Launched on March 20 on Ethereum, the fund, known as "BUIDL," has quickly reached a market cap of $244.8 million. This growth was driven by four significant transactions totaling $95 million within a week, making BUIDL the second-largest fund after Franklin Templeton's Franklin OnChain U.S. Government Money Fund (FOBXX) with $360.2 million in assets.

The milestone of over $1 billion in tokenized U.S. Treasurys is distributed across 17 different products, showcasing the expanding reach of this financial innovation. BlackRock's fund received a significant contribution from Ondo Finance, adding $79.3 million, a notable step in the fund's growth according to Tom Wan of 21.co.

BlackRock's BUIDL operates with a 1:1 peg to the U.S. dollar, providing investors with daily accrued dividends paid monthly. The launch of the fund utilized the Securitize protocol on Ethereum to leverage blockchain-based efficiencies.

BlackRock CEO Larry Fink and industry experts view tokenization as a way to streamline capital markets, with potential market size projections reaching $16 trillion by 2030. Tokenization efforts are not limited to government securities, as various assets like stocks and real estate are also being tokenized, with $700 million of total real-world assets (RWA) on-chain on Ethereum.

The tokenization trend extends beyond traditional asset management firms, with Franklin Templeton using Stellar and Polygon for FOBXX, highlighting a diverse ecosystem supporting tokenized products. Established financial institutions like WisdomTree and blockchain-native companies such as Ondo Finance and Backed Finance are actively participating in incorporating real-world assets into the digital blockchain space.

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