Reported by Cointelegraph, the BlackRock USD Institutional Digital Liquidity Fund has now become the largest treasury fund tokenized on a blockchain by surpassing Franklin Templeton’s product this week.

The BlackRock product named BUIDL, which is only six weeks old, has reached a market capitalization of $375 million, overtaking Franklin OnChain U.S. Government Money Fund (BENJI) that stands at $368 million according to data from Dune Analytics.

BUIDL saw an influx of $70 million last week, including $50 million from Ondo Finance’s OUSG token for real-world asset tokenization. Meanwhile, BENJI experienced a 3.7% decline in assets under management during the same period.

Currently, more than $1.2 billion worth of United States Treasurys can be found across various blockchains including Ethereum, Polygon, and Solana.

Though BlackRock CEO Larry Fink suggested that capital markets could benefit from moving on-chain, there is currently low demand for tokenized products, as noted by Tom Wan, a research strategist at 21.co. The "chicken and egg problem" arises as issuers are reluctant to tokenize assets due to insufficient demand.

Fortunately, there is an existing demand for U.S. Treasurys originating from players in the $140-billion stablecoin market, which might facilitate end investors transitioning when demand increases.

Currently, tokenized government securities make up 1.4% of the total assets tokenized on-chain, a significant jump from 0.1% at the beginning of 2023. Wan forecasts that this market dominance will surge to 10% in the future.