Tokenized Treasury Funds Reach $14.69 Billion as Liquidity Faces Test

Tokenized U.S. Treasury funds carried $14.69 billion in distributed value Friday, Oct. 16, across 117 assets, but the market tally does not show how much of that supply lenders have pledged as collateral. That gap matters because a fund’s onchain transferability does not guarantee a lender can sell it quickly or convert it to cash after a default.

The snapshot also listed 86,753 holders and $89.27 million in represented value. The figures describe the category’s size, not the amount available to meet margin calls.

Transfer restrictions can complicate sales. BlackRock’s BUIDL fund enables transfers around the clock, but only to other pre-approved investors. A lender facing liquidation would need an eligible recipient. A Saturday default may also leave a lender working from Friday’s price. Some private credit funds use monthly valuations, while Treasury bills may shift by a few basis points over a weekend. Token access and cash liquidity are separate measures: a transfer can take place without ensuring an eligible buyer or a current sale price.

Survey responses point to operational barriers as well. Of 203 market participants, 52% expected to manage live tokenized collateral by the end of 2026. Seventy percent reported daily settlement matching or delivery problems, and the average excess collateral buffer was 7%.

A July 15 production event included J.P. Morgan posting tokenized assets to meet margin requirements at CME Group’s central counterparty. The workflow shows tokenized assets being used in a live margin process, but does not establish broad liquidity across tokenized funds.

The CFTC’s case-by-case assessment of tokenized collateral covers legal enforceability, custody and segregation, liquidity, haircuts and operational risk. DTCC expects its tokenization service to enter production in the fourth quarter of 2026. The Future of Capital Markets: Lugano 2026 is scheduled for Thursday, Oct. 22, in Lugano, Switzerland, with a panel on fixed income and tokenized collateral.