Tokenized Treasuries Explained: Structures and Risks
Quick answer. Tokenized treasuries are tokens giving exposure to short-term US government debt, often as fund shares recorded onchain. Their risk is the debt plus the structure: issuer, transfer agent, contracts and keys, redemption terms and chain.
Video transcript
Tokenized treasuries look alike onchain. The legal claims behind them do not, and that is where the risk sits.
On November 6, 2026, one tracker counted 14.24 billion dollars across 123 tokenized Treasury products.
With fund shares, you own a share and the fund owns the Treasuries. Notes are a claim on the issuer. Wrappers are funds that hold other funds.
Each structure changes who you are exposed to, from issuer, custody and record keeping to contracts, redemption and chain. This is Guardian's reading, built from the issuers' own documents.
Franklin's transfer agent can correct unauthorized transactions and limit transfers. That protects holders, but it is also a key someone holds, so ask who holds it.
Transfers run around the clock, but redemptions mostly do not. They follow set hours, business days, daily limits and wire rules.
A stable dollar is a target, not a promise. BlackRock and Franklin Templeton both say their funds may not hold one dollar.
Before an allocation, Guardian asks what the structure is, who keeps the record, who holds custody and the admin keys, whether deployed code matches the audit, and how redemption holds up under stress.
Guardian underwrites onchain positions on evidence: the deployed code, who controls it, and what it depends on. Read the full article, or talk to Guardian about underwriting the token.
Tokenized treasuries put short-term US government debt on a blockchain, as a token you can hold, transfer and redeem.
On November 6, 2026, RWA.xyz showed $14.24 billion of "distributed value" across 123 tokenized Treasury products, with 86,241 holders.
The tokens look alike onchain. The legal claims behind them do not, and that is where the risk sits.
What a Tokenized Treasury Is
The underlying assets are ordinary. Franklin Templeton's onchain fund invests at least 99.5% of total assets in government securities, cash and fully collateralized repos.
BlackRock's BUIDL, at launch, invested 100% of total assets in cash, US Treasury bills and repurchase agreements.
What changes is the wrapper and the record. The largest products on RWA.xyz that day:
| Product | Platform | Value |
|---|---|---|
| Ondo U.S. Dollar Yield (USDY) | Ondo | $2.39B |
| Circle USYC | Circle | $2.18B |
| BlackRock USD Institutional Digital Liquidity Fund (BUIDL) | Securitize | $1.87B |
| iBENJI | Franklin Templeton Benji Investments | $1.71B |
| BENJI | Franklin Templeton Benji Investments | $1.16B |
Three Structures
Fund shares onchain
The token is, or records, a share in a fund. You own a fund share, and the fund owns the Treasuries.
Franklin OnChain U.S. Government Money Fund intends to be a government money market fund under Rule 2a-7 of the Investment Company Act.
Its transfer agent "maintains the official record of share ownership" through a blockchain-integrated system, using one or more public blockchains.
BUIDL launched in March 2024 on Ethereum. At launch, BNY Mellon was named custodian and administrator, and Securitize transfer agent and tokenization platform.
BUIDL aims for $1 per token and pays daily accrued dividends as new tokens. Securitize's page now lists share classes on eight chains, including Ethereum, Solana and BNB Chain.
Notes
Ondo describes USDY as "a tokenized note". You hold a claim on the issuer, not a fund share.
Its original issuer, Ondo USDY LLC, was folded into the Ondo Stocks umbrella on December 15, 2025, Ondo says. Check which entity issued your notes.
Depending on issuance date, Ondo says USDY may be secured by short-term Treasuries, shares of the iShares Short Treasury Bond ETF, or bank demand deposits.
It is for qualifying non-US investors. Its price rises as yield accrues; a rebasing version, rUSDY, holds $1 and adds tokens instead.
Wrappers and funds of funds
Some tokens are funds that hold other funds. Ondo's OUSG is a tokenized fund invested in funds from BlackRock, Franklin Templeton, WisdomTree, Fidelity and others, plus bank deposits and USDC.
OUSG publishes its NAV to an onchain price oracle each business day. Each layer adds a manager, its own documents and its own redemption terms.
Who You Are Exposed To
Guardian's reading of the risks in each structure, built from the issuers' own documents:
| Risk | Fund shares | Notes | Wrappers |
|---|---|---|---|
| Issuer | The fund and its manager | The note issuer's credit and collateral terms | The wrapper, plus every underlying fund |
| Custody | The fund's custodian | Wherever the note documents place collateral | Underlying custodians, plus the wrapper's own accounts |
| Record | The transfer agent's books | The issuer's register and token contract | The wrapper's contract and investor list |
| Smart contract | Allowlist and admin controls | Token, pricing and rebasing logic | Mint, redeem and price oracle contracts |
| Redemption | Business days, through the transfer agent | The issuer's terms and payment rails | Wrapper limits, then the underlying funds |
| Chain | Outages, forks and fees | Bridged copies on other chains | The settlement stablecoin, plus each chain |
For how permissioned tokens enforce allowlists, see ERC-3643 vs ERC-1400.
Smart Contract and Key Risks
Franklin's prospectus is unusually direct. Its blockchain risks include:
- Delays when nodes cannot reach consensus.
- "Undiscovered technical flaws" in the transfer agent's system, or in how private keys are held.
- Cryptographic or other security measures being compromised or hacked.
- Network forks and volatile transaction fees.
Investors using their own wallets "are responsible for securing their private key against loss or theft".
Admin powers cut both ways. Franklin's transfer agent can "correct errors and unauthorized transactions in, and limit the transferability of, Fund shares".
That protects holders if it works. It is also a key someone holds. Ask who holds it, and under what controls.
Redemption and Liquidity
Transfers can run around the clock. Redemptions mostly do not.
- BUIDL: redemption requests must reach the transfer agent between 8:00 AM and 3:00 PM ET.
- Franklin: purchases and redemptions are processed only during business hours on business days.
- OUSG: instant redemptions in USDC, within daily limits; larger amounts go through a standard request.
- USDY: USD redemptions go by wire, to non-US bank accounts only.
A stable $1 is a target, not a promise. BlackRock warned at launch that BUIDL "may not be able to maintain a stable value of $1.00 per token at all times".
Franklin's prospectus says the same of its fund: it "cannot guarantee" the $1.00 share price.
Diligence Questions
Guardian's questions before an allocation:
- Is the token a fund share, a note or a wrapper? What does the prospectus or offering document say?
- Who keeps the official record: the transfer agent, the issuer or the contract?
- Who custodies the underlying assets, and are they bankruptcy remote?
- Which admin roles can mint, burn, freeze, pause or upgrade, and who holds those keys?
- Have the deployed contracts been audited, and do they match the audited code?
- Where does the price come from, and who can change the oracle?
- What are the redemption hours, limits and payment rails under stress?
- Which chains and bridges carry the token, and which copy is canonical?
- What happens to holders if the platform or transfer agent fails?
For the wider picture, see RWA tokenization and our tokenized stocks risk guide.
How Guardian Helps
Guardian underwrites onchain positions for capital allocators on evidence: the deployed code, who controls it, and everything it depends on.
That review covers signer sets, thresholds, timelocks and admin keys, plus oracles, bridges and upstream protocols.
Monitoring then watches new implementations, control changes and dependency drift, so a position is re-scored when the risk moves.
Frequently Asked Questions
What are tokenized treasuries?
Tokens that give exposure to short-term US government debt. Many are shares of a money market style fund recorded onchain; others are notes secured by Treasuries and similar assets, or wrappers that hold other funds.
How risky are tokenized treasuries?
They carry the risk of short-term government debt plus the token's own: the issuer or fund, the transfer agent, contracts and keys, redemption terms and the chain. BlackRock and Franklin Templeton both say their funds may not hold $1.
Who can buy tokenized treasuries?
It depends on the product. BUIDL launched for qualified investors with a $5 million minimum, USDY is for qualifying non-US investors, and Franklin's onchain fund sets a $20 minimum for most accounts, after KYC.
Can tokenized treasury tokens move freely onchain?
Not always. BUIDL permits transfers only to whitelisted investors, OUSG only between onboarded investors, and Franklin's transfer agent can limit transfers and correct unauthorized ones.
Sources
- RWA.xyz: Tokenized Treasuries dashboard (read November 6, 2026)
- Franklin Templeton: Franklin OnChain U.S. Government Money Fund, Summary Prospectus (August 1, 2026)
- BlackRock press release (Business Wire, republished by Silicon UK): BlackRock Launches Its First Tokenized Fund, BUIDL, on the Ethereum Network (March 20, 2024)
- Securitize: BlackRock USD Institutional Digital Liquidity Fund (BUIDL) (read November 6, 2026)
- Ondo Finance Docs: USDY basics (read November 6, 2026)
- Ondo Finance Docs: OUSG overview (read November 6, 2026)
Underwrite the token, not just the Treasuries
Guardian reviews the contracts, keys and dependencies behind a tokenized position, then keeps watching for the changes that move its risk.