BlackRock, Ondo, and Franklin dominate a three-way race: the structural evolution of the RWA U.S. Treasuries track from institutional-led to retail participation

In May 2026, leading digital asset trading platforms explicitly list tokenization of real-world assets (RWA tokenization) as the "next trillion-dollar track," with on-chain US bonds and interest-bearing assets viewed as the core pillars for scale expansion. This judgment is not an isolated case. During the same period, the total locked value of tokenized US Treasury markets has quietly surpassed $65 billion, with traditional asset management giants and native DeFi protocols accelerating their integration.

But narratives are one thing, products are another. When BlackRock BUIDL, Ondo Finance’s USDY, and Franklin Templeton’s FOBXX are all presented to ordinary users simultaneously, the questions to answer are: what exactly are their differences? What can users actually buy? Where are the risks hidden? This article, based on market data and product structures as of June 1, 2026, dissects the underlying logic, competitive landscape, and entry pathways of these three core RWA products.

Why Tokenized US Bonds Became a Phenomenal Track in 2026

From a modest trial of less than $1 billion in 2023, the tokenized US Treasury market broke through $65 billion by mid-2026 in just three years. This explosive growth is not solely driven by crypto narratives but results from the combined forces of macro interest rate environments, institutional asset management strategies, and on-chain infrastructure.

Short-term US Treasuries in the first half of 2026 offered an annualized yield of 4.8% to 5.2%, representing a relatively high sideways range in the US interest rate cycle. Traditional money market funds continue to absorb large inflows, but tokenized US debt products on-chain are beginning to show unique advantages: 24/7 redemption, composability with DeFi protocols, and automated yield distribution via smart contracts. These features are nearly impossible to achieve with traditional financial infrastructure.

BlackRock entered this window decisively. After launching the tokenized fund BUIDL in March 2024, it attracted hundreds of millions of dollars in deposits in the first week, with AUM rising quarter by quarter, reaching about $28 billion by June 2026. Franklin Templeton’s move was even earlier; its OnChain US Government Money Fund (FOBXX) was deployed across multiple chains like Ethereum, with AUM around $19 billion at the same time. Ondo Finance took a different route—it does not directly issue funds but packages underlying assets like BUIDL into yield-bearing stablecoins such as USDY, which has surpassed $9 billion in market cap, becoming a key hub connecting institutional-grade assets and user funds.

These three products account for over 80% of the tokenized US Treasury market. This pattern indicates that the RWA US debt track has entered a highly concentrated “three-strong competition” phase, with the core debate shifting from “who can go on-chain” to “who can reach more users.”

The core change in the tokenized bond market is not the on-chain asset itself but the systemic rewriting of traditional financial product distribution channels and access rules through on-chain protocols.

These Three Products Are Not the Same; Their Access Logic and Risk Structures Are Fundamentally Different

There is a popular but vague narrative: tokenized US bonds allow users to share in US Treasury yields. This statement is only true under certain conditions. The three products target different user groups, have distinct legal structures, and bear different risks. Comparing them under the same “US bond yield product” label is a misconception.

BlackRock BUIDL is a compliant fund registered under the U.S. Investment Company Act, with underlying assets including short-term US Treasuries, overnight repurchase agreements, and cash equivalents. Each BUIDL token is pegged to $1 net asset value, with an annualized net yield of about 4.82%. The issue lies in subscription eligibility—BUIDL is only open to qualified investors as defined by the SEC, with a minimum subscription of $100,000, completed through designated distribution platforms. Holding BUIDL directly involves legal and operational barriers.

Franklin’s FOBXX has a similar regulatory framework, also registered as a money market fund holding US government securities, repos, and cash equivalents, with an annualized net yield of about 4.88%. Its on-chain token BENJI circulates across multiple chains, but the native subscription channels are not open to ordinary users. Its on-chain ecosystem expansion is slow, with limited DeFi composability, more resembling a traditional fund’s on-chain mirror rather than a product designed for crypto-native users.

Ondo Finance’s positioning is entirely different. It does not issue regulated fund products but builds a yield aggregation layer that packages assets like BUIDL into yield-bearing stablecoins such as USDY. Through over-collateralization and structured arrangements, it offers an annualized yield close to the underlying assets—currently about 4.95%. The key difference is that USDY has no minimum subscription threshold; users can subscribe and redeem directly via platforms like Gate, with an experience nearly identical to buying USDT.

However, this convenience comes at a cost. When users buy USDY, they do not hold a legal receipt of US Treasury benefits but a tokenized yield receipt issued by the Ondo protocol. Users bear risks not only from US Treasury interest rate and credit risks but also from smart contract vulnerabilities, counterparty risks of custodians, and potential regulatory policy changes affecting protocol compliance.

The RWA track is forming a three-layer architecture: “asset issuance, protocol packaging, platform distribution,” with risks being redistributed across these layers.

Institutional Compliance High Ground vs. User Efficiency Gateway: Why Is the RWA Track Diverging?

The three products are taking very different paths, reflecting a fundamental split in the RWA track: should tokenized assets lean toward the open efficiency of native crypto finance or toward the compliance and safety of regulated traditional finance? This divergence is especially sharp in 2026.

BUIDL and FOBXX represent the “compliance-first” route. Both asset management giants boast top-tier global credit backing and regulatory communication capabilities. Their core users are institutional investors, family offices, and crypto-native funds—those most concerned with asset safety and legal clarity. BUIDL uses regulated transfer agents for on-chain record updates, while FOBXX retains traditional transfer agency mechanisms—both trade compliance complexity for institutional trust.

Ondo embodies the “efficiency-first” route. It does not aim to be a regulated fund issuer but positions itself as an on-chain yield distribution protocol, reducing user participation barriers through technology. USDY has integrated into multiple lending protocols and yield aggregators, with far greater DeFi composability than BUIDL and FOBXX. This strategy has proven highly effective for user growth—USDY’s market cap surged from less than $1 billion at the end of 2024 to $9 billion by June 2026, following a growth curve similar to the stablecoin expansion during DeFi Summer.

The tension between these two paths is increasingly evident in 2026. Market participants debate a core question: when users hold BUIDL yields indirectly via packaging protocols, do they truly hold compliant assets? If packaging protocols suffer technical failures or legal disputes, how are user rights protected? These questions currently lack clear legal answers, and this uncertainty constitutes the biggest hidden risk in the RWA track.

Decentralization is another contentious point. Some DeFi purists criticize that all three products are essentially centralized custody structures, with potential for asset freezing and censorship. Conversely, others argue that fully decentralized tokenized US bonds are infeasible under current legal frameworks—US Treasury issuance and custody must rely on licensed institutions, an unavoidable reality.

The route dispute in the RWA track essentially boils down to a question: how much centralization is acceptable for on-chain finance to reach trillion-dollar scale?

User Entry Paths Are Now More Concrete, But Risk Attribution Needs Reconsideration

By 2026, ordinary users’ ways to participate in tokenized US bonds are much clearer than two years prior. Through platforms like Gate, which have established compliant infrastructure, users can directly access RWA zones to buy products like USDY, completing on-chain subscriptions and redemptions, with processes similar to mainstream stablecoins.

But this does not mean users and institutions are on the same footing. The legitimate pathways to directly hold BUIDL or BENJI are still only open to qualified investors. The main way for users to access underlying US Treasury yields remains through packaging protocols like Ondo or other wrapping schemes. Users need to understand that they are holding a layered risk exposure: the underlying US Treasury yield, the execution risk of smart contracts, and the governance and compliance capabilities of the protocol team.

This multi-layer risk structure has not yet been tested in extreme market conditions in 2026. If a large-scale on-chain security incident occurs, or if a major packaging protocol is deemed non-compliant by regulators, the tokenized US debt market could undergo a “stress test.” At that point, the risk pricing gap between fully regulated products (BUIDL, FOBXX) and packaged products (USDY) will become truly apparent.

From a macro perspective, the RWA track is rewriting the liquidity structure of traditional financial assets. US Treasuries, once the most liquid assets globally, are still traded within bank hours, settlement cycles, and intermediary chains. On-chain packaging turns Treasury yield rights into programmable, divisible, and composable digital assets, potentially shifting some pricing power from the traditional bond market to on-chain markets. This shift is still early but clearly headed in that direction.

ETFs change asset allocation methods; RWA changes the very form of assets—broadening channels and reconstructing underlying liquidity structures.

The Second Half of the Three-Strong Competition: Redefining Efficiency and Compliance Boundaries

As of June 2026, the three-strong pattern in the tokenized US Treasury track is likely to persist, but several key structural changes may occur.

BlackRock’s institutional-led model faces growth limits. The total qualified investor base is finite. To continue expanding AUM, BUIDL must either lower subscription thresholds or promote packaging protocols to widely adopt BUIDL as a core asset. Recent developments suggest BlackRock’s attitude toward packaging protocols is shifting from passive acceptance to active collaboration, possibly indicating increased retail indirect penetration.

Franklin’s FOBXX faces a relatively awkward position. It is on par with BUIDL in compliance but lags behind Ondo in DeFi ecosystem development and brand appeal. Its growth may rely more on partnerships with established crypto platforms, via white-label packaging or co-branding, to expand user reach.

Ondo, at the efficiency route’s forefront, also faces the greatest uncertainty. Its over-collateralized model and custody structure work well in stable markets, but in extreme volatility or regulatory scrutiny, restoring user confidence could be costly. Its long-term competitiveness depends on whether it can balance openness and efficiency with increasing compliance and safety—possibly by adopting more disclosure, third-party audits, or obtaining licenses in specific jurisdictions.

For the entire RWA track, the ultimate pattern hinges on a key variable: how regulators view the legal status of packaging protocols. If the SEC or Federal Reserve explicitly endorse compliant packaging paths, the trillion-dollar narrative will have a solid foundation; if regulation tightens, products like BUIDL will accelerate retailization, and the track may undergo a “shakeout from the top.”

When trillions of traditional assets start migrating on-chain, the early opportunities are not solely for the most compliant institutions or fastest-growing projects but for those products that find a sustainable balance between efficiency and compliance.

Conclusion

In the trillion-dollar narrative of tokenized US bonds, ordinary users’ role is never to chase a single product but to penetrate through the three-layer structure—underlying assets, packaging protocols, and access platforms—to understand what they truly hold and where risks lie. As BlackRock, Ondo, and Franklin each establish compliance high grounds and efficiency gateways, retail investors’ real moat is not just choosing the right product but mastering cross-layer analysis. The boundaries between efficiency and compliance will be repeatedly challenged, but one thing is clear: the RWA track has irreversibly moved from an institutional back-end game to a configuration on retail dashboards.

FAQ

What is the total size of the tokenized US Treasury market in 2026?

By June 2026, the total locked value of tokenized US Treasuries exceeded $65 billion, with BlackRock BUIDL, Franklin FOBXX, and Ondo USDY accounting for over 80% of the share.

What is BlackRock BUIDL?

BlackRock BUIDL is a blockchain-based tokenized fund with underlying assets including short-term US Treasuries and repos, with each token pegged to $1 net asset value, offering about 4.82% annualized yield, only available to qualified investors.

How does Ondo USDY differ from directly holding US Treasuries?

USDY is a yield-bearing stablecoin issued by Ondo, backed by assets like BUIDL, providing yield through over-collateralization. Users can buy without qualified investor restrictions but bear additional smart contract and counterparty risks.

Can ordinary users buy the on-chain token BENJI of Franklin FOBXX?

No, the native subscription channel for FOBXX’s BENJI is not open to ordinary users. They typically access its underlying yield indirectly via third-party wrapping tools or yield protocols.

How do users participate in the RWA US debt track?

Mainly through wrapping yield protocols (like Ondo USDY) or RWA zones on compliant exchanges, experiencing a process similar to buying stablecoins but with layered risks to understand.

What is the biggest hidden risk in the current RWA track?

The regulatory status of packaging protocols remains unclear. If regulators tighten or if a protocol faces security issues, users holding tokenized US debt could face redemption delays or losses.

How does tokenized US debt impact the traditional bond market?

It turns US Treasury yield rights into programmable, divisible digital assets, potentially shifting some pricing power from traditional bond markets to on-chain markets, gradually changing liquidity structures.

How can ordinary users balance yield and risk?

Users should assess their risk tolerance, diversify between regulated products (via wrapping) and high-efficiency protocols, and ensure each layer has verifiable on-chain proof.