Tokenized Treasuries vs Bonds: Which Pays More?

The world of fixed-income investments is being rewritten by blockchain. While traditional U.S. Treasuries have long been seen as the safest asset class, tokenized Treasuries are now challenging their dominance by offering higher accessibility, faster settlement, and potential on-chain yields.

The question for 2025 isn’t whether tokenized Treasuries will matter, it’s how they compare to traditional bonds when it comes to returns and reliability.

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Key Takeaways

1. Tokenized Treasuries Simplify Access: They make U.S. debt tradable 24/7 on blockchain networks.

2. Higher Yield Opportunities: Tokenized products often pass on returns directly to investors.

3. Institutional Adoption Rising: Major asset managers and banks are bringing government bonds on-chain.

Understanding Treasuries and Their Digital Counterpart

U.S. Treasuries are the cornerstone of global finance, prized for their safety and liquidity. Issued by the U.S. Department of the Treasury, they come in various maturities, bills, notes, and bonds, and serve as the backbone for both personal and institutional portfolios.

Investors buy Treasuries to earn steady, low-risk returns, typically in the range of 3-5% depending on interest rates and maturity.

The Rise of Tokenized Treasuries

Tokenized Treasuries are digital representations of these government-backed securities issued and traded via blockchain.

They retain the same credit quality as traditional Treasuries but add blockchain’s key advantages:

• Instant or near-instant settlement

• Fractional ownership for smaller investors

• Global, 24/7 trading

• Transparent record-keeping and automation through smart contracts

According to the Bank for International Settlements (BIS), tokenized bonds already show lower bid-ask spreads and comparable issuance costs to conventional ones.

This efficiency, combined with reduced settlement risk, gives investors a more flexible and modern way to earn stable yields without depending on slow, paper-heavy systems.

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How Tokenized Treasuries Compete with Traditional Bonds

Traditional bonds still dominate institutional portfolios, but tokenization is shifting how value flows through fixed-income markets. The difference lies in structure, cost, and liquidity.

Efficiency and Accessibility

Conventional bonds rely on multiple intermediaries, brokers, custodians, and clearinghouses, causing settlement delays and extra fees. Tokenized Treasuries cut through this web.

Transactions execute on blockchain, allowing real-time ownership updates and reduced counterparty risk.

Yield and Distribution

While traditional Treasury ETFs or mutual funds often have management fees that slightly trim returns, tokenized Treasuries can distribute yield directly to holders. For example:

• BlackRock’s BUIDL Fund became the largest tokenized Treasury fund within 40 days, offering on-chain liquidity and instant redemptions.

• Franklin Templeton and Ondo Finance provide tokenized U.S. Treasuries with direct access to daily yield accruals.

By removing intermediaries and automating payouts through smart contracts, tokenized Treasuries make yield distribution faster and fairer.

Institutional Adoption

Banks and asset managers are catching on. Many now test blockchain-based settlement systems for fixed-income products.

Research from SIFMA and BIS shows that distributed ledgers could reduce reconciliation errors and costs by up to 85%, reshaping how global debt markets operate.

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Which Pays More: Tokenized Treasuries or Bonds?

When comparing returns, the difference isn’t in the underlying yield, it’s in accessibility and efficiency.

Both tokenized and traditional Treasuries track U.S. government rates, but blockchain products offer added benefits that can slightly improve effective yield.

Comparing Yield Scenarios

• Traditional Treasuries: Investors earn fixed interest over time, but settlement delays and intermediary fees slightly reduce net returns.

• Tokenized Treasuries: With automated settlements and no middlemen, investors receive yields faster and sometimes higher through direct exposure.

For instance, the Janus Henderson Anemoy Treasury Fund and Ondo’s OUSG both deliver returns similar to short-term Treasuries (around 4-5%) but add liquidity options such as 24/7 redemption.

These subtle improvements can make a big difference in active trading or yield optimization strategies.

Broader Market Impact

As tokenized Treasuries become mainstream, they may influence DeFi yields too. Users can use these assets as collateral on lending platforms, generating double exposure, earning Treasury yields while borrowing against the token’s value.

This combination has sparked growing interest from crypto investors seeking low-risk yet flexible opportunities.

Read Also: Tokenized Treasuries 2025: Yield on Bitrue

Conclusion

Tokenized Treasuries aren’t replacing traditional bonds overnight, but they’re redefining what fixed-income investing looks like.

They combine the stability of U.S. government debt with the speed, transparency, and accessibility of blockchain.

With over $8 billion already tokenized and more banks planning to issue digital bonds by 2026, this market is just getting started.

For investors seeking to enter this new frontier, Bitrue offers an easy and secure way to explore tokenized assets and crypto-based fixed-income products.

With simple tools, strong security, and user-friendly trading options, Bitrue makes earning from digital Treasuries safer and more accessible than ever.

FAQ

What are tokenized Treasuries?

They are blockchain-based digital versions of U.S. Treasury securities, offering the same yields but faster settlement and lower costs.

How do tokenized Treasuries differ from traditional bonds?

Traditional bonds are traded through intermediaries, while tokenized Treasuries use blockchain to automate transactions, reduce fees, and enable 24/7 access.

Are tokenized Treasuries safe?

Yes. They are backed by U.S. government debt, just like traditional Treasuries, but issued and managed through regulated blockchain systems.

Can I earn higher yields from tokenized Treasuries?

Yields are similar to regular Treasuries, but you may gain slightly higher effective returns due to faster settlements and lower costs.

Where can I trade tokenized Treasuries?

You can explore tokenized Treasury products through regulated crypto platforms like Bitrue, which supports secure trading of blockchain-based financial assets.

Disclaimer: The views expressed belong exclusively to the author and do not reflect the views of this platform. This platform and its affiliates disclaim any responsibility for the accuracy or suitability of the information provided. It is for informational purposes only and not intended as financial or investment advice.