Tag: Tokenized RWAs

Tokenized Treasuries Highlight the Difference Between Ownership and Utility

Tokenized real-world assets (RWAs) can remain largely inactive without necessarily indicating that a product has failed, according to Tolkachev. A Treasury fund that pays its yield and redeems on time is doing its job while sitting in a wallet.

In Tolkachev’s assessment, low activity becomes a concern when an issuer has designed and priced a product for borrowing but holders leave it unused after launch. The intended purpose of the asset is therefore central to evaluating its performance: a fund designed to generate income may not need frequent trading, while a token intended for collateral, settlement or movement between platforms requires deeper utility.

Castle Labs’ Sep. 14 report, Beyond Tokenisation: Making RWAs Useful Onchain, argued that tokenization platforms need to give holders practical ways to trade, borrow and transfer assets between venues. The report identified more than $15.9 billion in tokenized U.S. Treasuries, alongside $4.9 billion in commodities, $3.6 billion in active strategies, $2.56 billion in asset-backed credit and $2.52 billion in stocks.

Castle Labs said new listings add less value when the underlying assets lack deep liquidity or connections to financial applications. Separately, a Sep. 15 report citing RWA.xyz placed distributed asset value at $38.86 billion. That coverage also cited Pantera Capital’s classification of 77.6% of tracked assets as wrappers, a measure of product structure rather than the share of dollar value sitting idle.

Collateralized Lending Requires Reliable Pricing and Liquidity

Tolkachev said the Treasury category helps explain why large issued balances can coexist with limited movement. Many holders buy these products to hold and earn, much as traditional finance investors purchase certain instruments with the intention of holding them until maturity.

However, an asset faces additional requirements when its intended use includes moving between platforms, securing loans or trading against available buyers. Under Tolkachev’s approach, a fund held for income and a token used as collateral must be assessed against different measures of success.

When a token becomes loan collateral, lenders must account for the difference between blockchain trading hours and the operating hours of the market for the underlying assets. A token may trade around the clock while its backing assets follow a separate schedule. Lenders therefore need to estimate how much collateral they could sell during the least favorable market window and set borrowing limits accordingly.

Tolkachev also said lenders must identify when a quoted price is outdated instead of treating it as a current valuation. This is solvable, but it has to be designed into the product. Tokenization alone does not do it.

A Sep. 4 report on Falcon’s RWA collateral tests detailed how the company evaluates legal claims, redemption terms, secondary-market liquidity, price feeds and credit quality before accepting an asset. In an earlier interview, Tolkachev said Falcon checks how quickly seized collateral can be converted into cash and how much value could be recovered under stressed conditions. The review also examines a token holder’s claim if the issuer fails and whether another buyer exists when redemption is unavailable.

The same report recorded $3.79 billion deployed in protocols out of a $34.6 billion tokenized RWA market, using DeFiLlama data. At that snapshot, JAAA and reUSD had utilization above 97%, while BUIDL, BENJI and USYC each had utilization below 1% in the applications measured.

RWA Lending Deposits Expand Despite a Decline in Overall DeFi Deposits

A Sep. 24 report on the tripling of RWA deposits offered another measure of actual use, drawing on research from CoinShares and Token Terminal. Between the second quarters of 2025 and 2026, deposits of tokenized assets across lending protocols and decentralized exchanges increased from $2.3 billion to $7.4 billion, according to the research.

Total DeFi deposits fell by about 15% over the same period, indicating that tokenized asset deposits grew even as the broader decentralized finance market recorded weaker balances.

CoinShares’ Aug. 6 Hybrid Finance report examined distributed assets that could move outside their issuing platforms. Its main analysis excluded networks such as Canton and Provenance. Tokenized Treasury and multi-strategy products supplied much of the collateral, with JTRSY, BUIDL and sUSDS among the largest contributors. Private-credit products included JAAA, syrupUSDT, syrupUSDC and PRIME.

CoinShares said yield-bearing collateral was concentrated on Aave, Morpho and Kamino. These platforms allowed investors to continue earning income on some assets while borrowing against them. Ethereum hosted almost 70% of measured RWA deposits, according to the report.

DTCC Tests Tokenized Securities in Settlement and Collateral Workflows

Institutional adoption also appeared in a Sep. 20 report covering the use of tokenized securities in settlement, including production transactions processed through the Depository Trust & Clearing Corporation (DTCC).

DTCC announced that more than 30 firms participated in its July 15 initiative, which converted securities held at the Depository Trust Company into tokens for actual transactions. The transactions included U.S. Treasury repo trades, securities lending, collateral pledges, equity settlement and central-counterparty margin workflows.

According to DTCC, the conversions took place on its private Besu network and the public Canton network. For holders of U.S. securities, DTCC said the tokenized assets retain the investor protections, entitlements and ownership rights attached to their traditional forms.

DTCC’s service allows DTC participants to convert securities between conventional and tokenized versions and deliver the tokens to participant wallets. The July transactions preceded the service’s scheduled October 2026 launch and followed an SEC no-action letter allowing DTC to operate a tokenization service for assets in its custody.

Why This Matters

The developments show that tokenized RWA adoption is being measured in more than one way. Large issued balances can reflect investors holding income-producing products, while lending deposits, collateral utilization and settlement transactions provide evidence of more active onchain use.

For tokenized assets to support borrowing and institutional settlement, issuers and platforms must address practical issues including redemption, legal claims, price accuracy, secondary-market liquidity and the ability to exit positions during stressed conditions. The growth of deposits on Aave, Morpho and Kamino, as well as DTCC’s testing of tokenized securities, points to expanding use cases beyond simply representing assets on a blockchain.

Frequently Asked Questions

Does low activity mean a tokenized RWA product has failed?

Not necessarily. Tolkachev said a Treasury fund that pays its yield and redeems on time can be performing its intended role even if it remains in holders’ wallets. Low activity is more concerning when a product was designed and priced for borrowing but is not used after launch.

What is required for a tokenized asset to be used as collateral?

Lenders need to assess legal claims, redemption terms, price feeds, credit quality, secondary-market liquidity and the amount of collateral that could be sold during an unfavorable market window. They must also account for outdated prices and the different operating hours of blockchain and underlying markets.

How much did tokenized asset deposits grow?

According to research cited in the Sep. 24 report, deposits of tokenized assets across lending protocols and decentralized exchanges rose from $2.3 billion to $7.4 billion between the second quarters of 2025 and 2026.