Tokenized Treasuries Are Sold as One Institutional-Grade Asset. Only a Third of the Money Sits on the Top Regulatory Rung — and the Two Biggest Funds Aren't On It.

Tokenized U.S. Treasuries have become the respectable face of onchain finance. They crossed $16 billion this year, and the language around them is uniformly reassuring: BlackRock's BUIDL was hailed as “the first institutional-grade onchain fund”; the category is described as regulated, audited, the safest asset a blockchain has yet carried. Treated as one thing, it sounds like a single quality bar. Measured one fund at a time, it isn't.

OnChain Benchmark classifies each fund's regulatory standing independently — the registration behind it, the auditor, the recency of its attestations — on one scale across the whole market. On that scale, the $16.66 billion is a spectrum, not a plateau. Only $5.46 billion — about a third — sits on the top rung: an SEC-registered structure with a PCAOB-registered auditor and a recent attestation. Seven of the thirty funds clear it.

One label, four tiers

The seven funds on the top rung are the names the category's reputation is built on: BlackRock's BUIDL, JPMorgan's onchain money-market fund, WisdomTree, Franklin Templeton's BENJI, Ondo's OUSG, Fidelity's, and Dinari's. Below them is a second tier that is still heavily regulated but structured differently — a state trust charter, or an SEC registration with a named auditor rather than a PCAOB-registered one. Below that, funds regulated by a major foreign authority. And a remaining group whose standing our data does not fully verify. The chart shows where the market's capital actually sits across those tiers.

The most telling detail is where the money concentrates. The two largest tokenized Treasuries by capital — Circle's USYC at roughly $3.01 billion and Ondo's USDY at $2.12 billion — are noton the top rung. Both are highly regulated: USYC under a state trust framework, USDY under an SEC registration with a named auditor. But neither carries the specific SEC-plus-PCAOB standing that anchors the category's “institutional-grade” reputation. More than half of the market's capital, in other words, sits outside the tier the reputation is borrowed from.

Why the distinction is about to matter

For most of this market's life the difference was academic — tokenized Treasuries were a crypto-native curiosity, and one regulated fund looked much like another to the desks buying them. That is ending. Over 2025 and 2026 these funds moved into production workflows at banks, asset managers and corporate treasuries, and BlackRock has begun issuing tokenized money-market funds explicitly designed to back stablecoin reserves. A corporate treasury or a regulated reserve has a mandate; a mandate specifies exactly the kind of standing this data separates. The tier a fund sits in stops being a footnote the moment a policy requires a particular one.

None of this is a knock on the funds outside the top rung. A state trust charter and a foreign-regulator registration are real regulatory regimes, and several of the largest, most-used funds in the market sit in them by design. The point is narrower and more useful: “tokenized Treasury” is not a single quality bar, and treating it as one hides a distinction that allocators are about to have to make explicitly. As the category's infrastructure keeps maturing — a tokenization agent heading for public markets, clearing houses building regulated rails — the interesting question is not how big the market gets, but which tier the next wave of institutional capital is actually allowed to hold.