How does tokenized Treasury differ from holding US dollars in a foreign currency bank account? First, yield is typically higher: bank USD savings rates are usually far below Treasury rates, and CDs are closer but with lockup periods. Second, capital flexibility is better: tokenized Treasuries are typically more flexible than CDs (T+1 redemption vs. waiting for maturity). Third, risk structure differs: bank deposits have deposit insurance (up to $250K in the US), while tokenized Treasuries have no equivalent investor protection mechanism. Fourth, basic crypto operational skills are required (wallet, KYC, on-chain operations) — a barrier for non-crypto users whose learning cost should factor into the overall consideration.
The 'rebase' versus 'accumulating' interest models have an important tax implication in some jurisdictions that may affect your reporting approach. Rebasing model (USDY): your token balance increases automatically daily. In many tax frameworks, these daily increments may be treated as 'interest income received daily,' meaning a taxable event occurs every day. Accumulating model (OUSG): token quantity unchanged, NAV rises daily. A taxable event typically occurs only when you actually redeem or sell the token (similar to capital gains treatment). Tax classification of crypto assets in Taiwan is not yet fully clear, but if your RWA investment is substantial, consider the potential tax implications of different models when selecting a product, and consult a tax advisor if needed.
Since 2025, a notable trend is the rise of yield-bearing stablecoins — a retail-friendly wrapper for tokenized Treasuries. Mountain Protocol's USDM and Ondo's USDY both fall into this category: holders hold a 'stablecoin' priced near $1, but this stablecoin automatically generates interest daily (sourced from underlying short-term Treasury yields). Compared to traditional USDC/USDT, these tokens earn interest while maintaining stablecoin characteristics — an experience close to 'interest-bearing demand deposits.' This category is growing rapidly, being adopted by many DeFi protocols as a more capital-efficient fund storage tool. Expect more DeFi protocols to adopt yield-bearing stablecoins as default treasury reserve options over the next 1-2 years.
Tokenized government bonds and CBDCs (Central Bank Digital Currencies) are distinct concepts that are often conflated. CBDCs are digital currencies issued directly by central banks — essentially electronic cash, typically non-interest-bearing, with full government backing. Tokenized government bonds are products issued by private entities (asset managers, crypto protocols) that tokenize beneficial interests in government debt. Holders access government debt indirectly through private issuers, receive interest, but bear private issuer credit and technical risk. The relationship: if a country's CBDC matures and allows direct purchase of government bonds with automatic interest accrual, a CBDC could theoretically provide similar functionality to tokenized government bonds but government-directed. Most CBDCs remain in pilot phases; tokenized government bonds currently fill that gap.
Among all tokenized real-world assets, tokenized government bonds are the closest to 'earn money without doing anything' — once you buy, the US government pays you interest daily, requiring no action. But 'no action required' doesn't mean 'no understanding required.' Before transferring money, there are four things you must grasp.
When you buy Ondo's USDY or Franklin Templeton's BENJI, you hold a token — not actual US government debt. The difference matters.
The entity actually holding US Treasuries is the fund or SPV behind the issuer. Franklin's token is backed by an SEC-regulated money market fund that holds US government bonds. Your token represents your beneficial claim on that fund's shares. The legal chain is: you → token → fund share → US government bond — not: you → US government bond directly.
In most circumstances this doesn't affect your ability to collect interest — the fund's interest income flows through to token holders. But if the issuer encounters problems, your legal recourse is against the fund or SPV, not the US government. So 'backed by US Treasuries' does not equal 'zero risk' — you also bear issuer risk, smart contract risk, and platform operational risk.
Tokenized Treasury yields are not a fixed number. They track current market rates for short-term US government bonds, and the Fed Funds Rate directly influences that number.
From 2022-2024, the Fed raised rates aggressively, pushing 3-month T-bill yields from near zero to 5.3% — making tokenized Treasuries highly attractive. From late 2024, the Fed entered a cutting cycle. By early 2026, short-term Treasury rates had declined to approximately 4.3%, with further cuts expected.
This means: if you hold tokenized Treasuries now, yields may continue declining over the next year or two. This is not a tokenization problem — it's the natural characteristic of the underlying asset (short-term Treasuries). If you need guaranteed fixed income, tokenized Treasuries are not the right tool. If you accept floating yield that tracks market rates, with underlying assets free of credit risk, they fit your needs.
Major tokenized Treasury products target different user bases — confirm you're eligible.
Franklin Templeton BENJI: $1 minimum, global retail access, most complete SEC regulatory framework. But because the underlying is an SEC-regulated money market fund, token transfers have whitelist restrictions — you cannot deposit BENJI directly into DeFi lending protocols, limiting composability. Best for: long-term holders seeking the safest compliant framework who don't need DeFi integration.
Ondo USDY: ~$500 minimum, available to non-US global users, circulates across multiple public chains (Ethereum, Solana), depositable into select DeFi protocols. More flexible than BENJI but with a thinner compliance framework. Best for: advanced users wanting to combine yield income with DeFi applications.
Ondo OUSG: $100,000 minimum, accredited investors only, primarily for institutions and DAO treasury management. Best for: high-capital users with accredited investor status.
'Easy to buy, think carefully about exit' is the universal rule for RWA investing. Tokenized Treasury exit paths typically come in three forms.
Primary redemption: submit a request to the issuer to convert tokens back to fiat or USDC. Most tokenized Treasury products support this, typically T+0 to T+2 (0-2 business days to receive funds). Most direct method, but requires passing the issuer's KYC and may have minimum redemption amounts.
Secondary market sale: sell tokens to other buyers on a supported platform or DEX. Fast (minutes to hours), but you may sell at a slight discount to face value (bid-ask spread), and secondary market depth depends on demand — not every tokenized Treasury has an active secondary market.
DeFi lending collateral: if you don't want to sell (because you expect the yield income to continue), deposit tokens as DeFi lending collateral and borrow USDC for liquidity. This retains your token holding but introduces borrowing rate and liquidation risk.
Action guidance for you: Tokenized government bonds currently represent the clearest legal structure, most transparent underlying assets, and best liquidity in the RWA market. If you're approaching RWA for the first time, choosing this as an entry point is reasonable — lower risk and easier to understand than tokenized real estate or private credit. But remember: yields track the rate cycle, and the longer you hold, the more rate environment matters. Before buying, confirm you can accept a scenario where yields decline further over the next 1-2 years.