PANews reported on October 25 that according to The Block, JPMorgan analysts said in a report on Thursday that the tokenized treasury bond market has expanded rapidly over the past year and has reached nearly $2.4 billion. Although this scale is still far lower than the $180 billion stablecoin market, it highlights the potential challenge to the dominance of stablecoins and also indicates that tokenized treasury bonds may only partially replace stablecoins.
The report states that major stablecoin issuers like Tether and Circle do not share reserve revenue with users, a practice that could not only reduce their revenue but also classify stablecoins as securities. Such a classification would subject them to strict regulatory oversight, which could limit their use as collateral in the cryptocurrency market. While stablecoin users have sought various strategies to obtain returns, including lending, these methods come with risks and generally require surrendering control of their assets. In contrast, tokenized treasuries offer returns without the risks associated with complex trading or lending strategies, allowing users to maintain control of their funds.
But analysts point out that regulatory barriers remain a challenge for tokenized treasuries. Classified under securities laws, these products are limited to qualified investors, which limits broader market adoption. But tokenized treasuries are expected to grow further and could partially replace traditional stablecoins as collateral in areas such as crypto derivatives trading. Analysts point out that recent reports that BlackRock's BUIDL can be used as collateral on multiple crypto exchanges highlight the potential demand for tokenized treasuries. In addition, analysts say tokenized treasuries could also replace non-yielding stablecoins held by De-DAO vaults, liquidity pools, and crypto venture capital funds.
