On-Chain Treasury Bills — Comparison of Tokenized Products

Version: 1.0 | Updated: December 2025 Category: Institutionalization & TradFi | Level: Expert

Table of Contents

1. AT A GLANCE
2. INTRODUCTION
3. WHAT IS A TOKENIZED TREASURY BILL?
4. COMPARISON OF MAJOR PRODUCTS
5. CASE STUDY: ONDO FINANCE — THE COMPLETE RWA ECOSYSTEM
6. CASE STUDY: FRANKLIN TEMPLETON AND STELLAR
7. BLOCKCHAIN INFRASTRUCTURE: DETAILED ANALYSIS
8. SELECTION CRITERIA
9. RISKS
10. DeFi USE CASES
11. FRENCH TAX IMPLICATIONS
12. OUTLOOK
13. FAQ
14. CONCLUSION
15. SOURCES & REFERENCES

AT A GLANCE

Six billion dollars in tokenized T-Bills delivering 5 percent yield on-chain.

1. INTRODUCTION

BlackRock and Franklin Templeton are turning Treasury bonds into blockchain tokens.

Tokenized Treasury Bills are the fastest-growing RWA category. These products deliver the "risk-free" yield of U.S. Treasury bonds (~4–5%) directly on-chain, allowing crypto users to generate yield without leaving the ecosystem.

In 2025, over $6 billion is invested in these products, dominated by players like BlackRock, Franklin Templeton, and Ondo Finance.

Purpose of This Article

This guide provides a comprehensive comparison of major products:

• Yields, fees, minimums
• Accessibility and KYC
• Specific risks
• Which product suits which profile

2. WHAT IS A TOKENIZED TREASURY BILL?

A blockchain token that generates 5 percent yield backed by the U.S. Treasury.

2.1. Definition

A tokenized T-Bill is a blockchain token representing a share in a fund that invests in short-term U.S. Treasury bonds.

Simplified mechanism:

1. The issuer collects funds (USDC, USD)
2. Purchases U.S. T-Bills (1–6 month maturity)
3. Issues tokens representing fund shares
4. Distributes interest to holders (rebasing or accumulation)

2.2. Why It's Attractive

2.3. Types of Products

3. COMPARISON OF MAJOR PRODUCTS

BUIDL, OUSG, USDY: ten products analyzed for every profile.

3.1. Summary Table

3.2. Detailed Product Analysis

BlackRock BUIDL (USD Institutional Digital Liquidity Fund)

Strengths:

• Most reputable issuer (BlackRock = $10T AUM)
• BNY Mellon custody
• Regular attestations

Limitations:

• $5M minimum = reserved for large institutions
• No retail access
• U.S. only

SIGNIFICANCE

BUIDL validates tokenization at the highest institutional level. Its success paves the way for more accessible products.

Ondo Finance — OUSG

Strengths:

• Multi-chain (interoperability)
• Backed by BlackRock ETF
• Very low fees (0.15%)

Limitations:

• $100K minimum
• KYC required
• Transfer constraints (whitelist)

Ondo Finance — USDY

Strengths:

• Accessible minimum ($500)
• Wide multi-chain distribution
• Usable in DeFi

Limitations:

• Not accessible to U.S. residents
• KYC for large transactions
• Variable price (not stable at $1)

OUSG vs. USDY — KEY DISTINCTION

• OUSG = For institutions ($100K+), rebasing
• USDY = More accessible, rising price, integrated yield

Franklin OnChain US Government Money Fund (BENJI)

Strengths:

• Pioneer (since 2021)
• Major TradFi issuer ($1.5T AUM)
• SEC registered

Limitations:

• Less DeFi ecosystem on Stellar
• Primarily institutional access

OpenEden TBILL

Strengths:

• On-chain Proof of Reserve
• Maximum transparency
• Growing DeFi integration

Backed bIB01

Strengths:

• Swiss regulation (clear framework)
• iShares ETF backing
• European jurisdiction

Limitations:

• High minimum
• Less well known

Mountain Protocol USDM

Strengths:

• Accessible minimum
• Rebasing = stays at $1
• Multi-chain

3.3. Complete Comparison Table

4. CASE STUDY: ONDO FINANCE — THE COMPLETE RWA ECOSYSTEM

Ondo Finance deploys 600 million across six blockchains with BlackRock.

4.1. Overview of Ondo Finance

Ondo Finance has established itself as the leader in T-Bill tokenization for the retail and semi-institutional market. Founded in 2021 by Nathan Allman (ex-Goldman Sachs), Ondo raised over $34 million from investors including Founders Fund, Pantera Capital, and Coinbase Ventures.

4.2. Ondo Product Architecture

Complete product range for different profiles:

+-------------------------------------------------------------+
|                    ONDO FINANCE ECOSYSTEM                    |
+-----------------+-----------------+-------------------------+
|     OUSG        |      USDY       |        rOUSG            |
|  Institutional  |     Retail      |      DeFi Native        |
+-----------------+-----------------+-------------------------+
| Min: $100,000   | Min: ~$500      | Rebasing version        |
| KYC: Strict     | KYC: Light      | For DeFi integration    |
| Rebasing        | Accumulating    | Price stable at $1      |
| Whitelist       | More flexible   | Yield via supply        |
+-----------------+-----------------+-------------------------+

4.3. BlackRock Partnership — The Key Differentiator

OUSG underlying:

• Invested in iShares Short Treasury Bond ETF (SHV) by BlackRock
• $30 billion AUM for the underlying fund
• Average T-Bill maturity: 3–12 months
• Daily liquidity guaranteed

Connection with BUIDL: Ondo has also integrated BlackRock's BUIDL as a reserve, creating a unique synergy:

• Instant OUSG-to-USDC conversion via BUIDL
• T+0 redemption (same day)
• Maximum institutional backing

CAPITAL FLOW

Investor → USDC → Ondo → BlackRock SHV/BUIDL → U.S. T-Bills

4.4. Multi-Chain Deployment

Ondo adopted an aggressive multi-chain deployment strategy:

4.5. Major DeFi Integrations

USDY as collateral:

• Drift Protocol (Solana): Collateral for perpetuals
• Morpho (Ethereum): Lending market
• Kamino Finance (Solana): Yield strategies
• Mantle mETH: Partial backing

4.6. ONDO Tokenomics

IMPORTANT DISTINCTION

The ONDO token is NOT a tokenized T-Bill. It is the governance token of the platform. For T-Bill yield, use OUSG or USDY.

5. CASE STUDY: FRANKLIN TEMPLETON AND STELLAR

The 2021 pioneer that chose Stellar for its low costs.

5.1. First Tokenized Mutual Fund

Franklin Templeton was a pioneer in launching the first SEC-registered tokenized mutual fund back in 2021 — well before BlackRock's entry.

5.2. Why Stellar?

Franklin Templeton chose Stellar (XLM) as its primary blockchain for several reasons:

Stellar architecture for BENJI:

+----------------------------------------+
|         FRANKLIN TEMPLETON             |
|      OnChain US Gov Money Fund         |
+----------------------------------------+
| +-------------+    +-------------+     |
| |   STELLAR   |    |   POLYGON   |     |
| |  (Primary)  |    | (Secondary) |     |
| +-------------+    +-------------+     |
|         |                |             |
|    Asset issuance    EVM compat        |
|    Low cost          DeFi access       |
+----------------------------------------+

5.3. Multi-Chain Expansion

Franklin Templeton recently expanded BENJI to:

• Polygon: Access to the EVM ecosystem
• Arbitrum: Layer 2 for DeFi
• Avalanche: Under discussion

5.4. Stellar and RWA: The Ecosystem

Stellar has positioned itself as a blockchain of choice for institutional RWAs:

6. BLOCKCHAIN INFRASTRUCTURE: DETAILED ANALYSIS

Ethereum dominates with 65 percent of TVL versus Solana and Stellar.

6.1. Blockchain Comparison

6.2. TVL Distribution by Blockchain

Tokenized Treasury Bills TVL by Blockchain (Dec. 2025)

Ethereum    ████████████████████████████████  65%
Solana      ████████████                      15%
Stellar     ████████                          10%
Arbitrum    ████                               5%
Others      ███                                5%

6.3. Infrastructure Trends

1. Multi-chain by default Issuers now deploy across 3–5 chains from launch.

2. Layer 2 dominance Arbitrum and Base are capturing a growing share of TVL.

3. Native bridges Ondo and others are developing their own cross-chain bridges for USDY.

4. Chainlink CCIP interoperability Multiple products integrate CCIP for secure cross-chain transfers.

7. SELECTION CRITERIA

Institutions, retail investors, DeFi users: the optimal product for each profile.

7.1. By Investor Profile

7.2. By Primary Criterion

8. RISKS

No FDIC guarantee: the hidden risks of tokenized T-Bills.

8.1. Common Risks

8.2. Specific Risks

WARNING

• No FDIC guarantee: Unlike U.S. bank accounts
• No EU deposit guarantee: Not covered by guarantee funds
• Tokens ≠ direct T-Bills: You hold a token, not the T-Bill itself

8.3. Due Diligence

Before investing, verify:

• Issuer: Reputation, track record
• Audits: Smart contracts audited?
• Attestations: Proof of Reserve?
• Regulation: Clear jurisdiction?
• Redemption mechanism: How to exit?
• Hidden fees: Spread, exit fees?

9. DeFi USE CASES

USDY as collateral on Aave and Morpho to maximize yield.

9.1. Composability

Some tokenized T-Bills can be used in DeFi:

9.2. Strategies

Example with USDY:

1. Buy USDY (~5% native yield)
2. Deposit as collateral
3. Borrow stablecoins
4. Leverage strategy or other use

ADDITIONAL RISK

Using tokenized T-Bills in DeFi adds risks: smart contracts, liquidation, etc.

10. FRENCH TAX IMPLICATIONS

30 percent flat tax likely, but legal uncertainty on rebasing tokens.

10.1. Tax Treatment

10.2. Complexities

• Rebasing tokens: Is each rebase a taxable gain?
• Multi-chain: Complex tracking
• Foreign products: Foreign account reporting required?

RECOMMENDATION

Consult a tax professional for precise treatment. French tax authorities have not yet clarified all scenarios.

11. OUTLOOK

From 10 billion in 2025 to a projected 50 billion by 2027.

11.1. Expected Growth

11.2. Product Evolution

• More multi-chain: Increased interoperability
• Lower fees: Competition
• Accessibility: Lower minimums
• Regulation: Clearer frameworks (EU, U.S.)

11.3. Expected New Entrants

• Major banks: JPMorgan, Goldman?
• Stablecoin issuers: Circle, Tether?
• EU asset managers: MiCA-compliant players

12. FAQ

What is the risk of capital loss?

Very low on the underlying asset (U.S. T-Bills = AAA). Main risks: issuer counterparty, smart contract, regulation.

Will yields decline?

They follow Federal Reserve rates. If the Fed cuts rates, yields will decline proportionally.

Can I use these products from France?

Some yes (USDY, USDM with restrictions), others no (BUIDL reserved for U.S.). Check geographic restrictions.

What's the difference from a savings account?

No deposit guarantee, but potentially higher yield and 24/7 liquidity. Different counterparty risk.

USDC vs. tokenized T-Bills?

USDC = 0% yield, stable. Tokenized T-Bills = ~5% yield, slight additional risk.

What about taxes?

Likely 30% flat tax (PFU) on gains. Complexity for rebasing tokens. Consult an expert.

13. CONCLUSION

Tokenized Treasury Bills offer a unique opportunity: the "risk-free" yield of U.S. Treasury bonds, accessible on-chain. With over $6B in TVL and issuers like BlackRock, the market has reached significant maturity.

How to Choose

• Institution → BUIDL or OUSG
• Accessible retail → USDY or USDM
• DeFi user → USDY
• Cautious European → bIB01 (FINMA-regulated)

Key Considerations

• No deposit guarantee
• Issuer and smart contract risks
• Tax treatment to be clarified
• Monitor Fed rate changes

Related Articles — Institutionalization & TradFi

• ETF Bitcoin Spot: Flow and Market Impact
• Altcoin ETFs: SEC Pipeline and Probabilities
• RWA Tokenization: Market Map

14. SOURCES & REFERENCES

Official Sources

• BlackRock BUIDL (securitize.io/buidl)
• Ondo Finance (ondo.finance)
• Franklin Templeton
• OpenEden, Backed, Mountain Protocol

Data Sources

• RWA.xyz
• DeFiLlama

Article written in December 2025 — Yields and AUM are subject to change. Check official websites for the latest figures.

This content is for educational purposes only and does not constitute investment advice.