Tokenized US Treasuries Surpass $8 Billion: Ondo, BlackRock BUIDL, and Franklin Compete for On-Chain Treasury Dominance

As the tokenized U.S. Treasury market doubled in size over the past six months, surpassing $8 billion, a mainstream comparison framework is being reexamined. Ondo Finance is often mentioned alongside Franklin Templeton, as if the two represent opposite poles of the on-chain Treasury landscape. Yet, a closer look at their product structures and capital flows reveals a far more complex competitive reality than a simple "duopoly." BlackRock’s BUIDL, with approximately $2.5 billion in assets under management, dominates the underlying asset layer. Ondo acts as a distributor, bridging DeFi ecosystems, while Franklin Templeton, as the earliest entrant, maintains an independent product line and daily operations. Three distinct approaches and survival strategies are intertwined within the same on-chain Treasury network.

Reshaping Models and Market Structure

According to Token Terminal’s report on May 6, 2026, the total market capitalization of tokenized U.S. Treasury products deployed on Ethereum has surpassed $8 billion, marking a historic high with nearly 100% growth in the past six months. Key protocols contributing to this surge include Securitize’s BUIDL, Franklin Templeton’s iBENJI, Ondo Finance’s USDY, WisdomTree’s WTGXX, Centrifuge’s JTRSY, and Superstate’s USTB.

However, to analyze the competitive dynamics in this sector, one must first clarify a crucial fact: BlackRock’s BUIDL fund, issued via Securitize, is the clear leader in terms of scale, with about $2.5 billion in assets under management—commanding a central share of the roughly $8 billion tokenized Treasury market on Ethereum. Franklin Templeton’s on-chain products—including its U.S. Treasury money market fund BENJI (FOBXX)—are part of its parent company’s vast traditional fund system. Ondo Finance, meanwhile, has chosen a distinctly different path: its flagship OUSG product is backed by BlackRock’s BUIDL fund.

This means the current landscape is not simply a "two-horse race" in tokenized Treasuries, but rather a nested, symbiotic structure between issuers and distributors. BlackRock issues the underlying assets, Ondo handles on-chain distribution and DeFi integration, and Franklin Templeton pursues independent on-chain exploration as a traditional fund manager. The headline product, BUIDL, is BlackRock’s (not Franklin Templeton’s) core offering. Accordingly, this article clearly distinguishes the product lines: Franklin Templeton’s on-chain Treasury products (BENJI/FOBXX) and BlackRock’s BUIDL (with Securitize as transfer agent) are issued by separate entities.

Here’s a comparison of the core metrics for the three product lines:

Tracing the Evolution of Three Paths

The on-chain Treasury sector didn’t emerge overnight. Its development can be divided into three phases:

Emergence (2021–2023): In 2021, Franklin Templeton launched BENJI on the Stellar network, with each BENJI token representing a share of its U.S.-registered money market fund FOBXX. This made Franklin the world’s first traditional asset manager to use a public blockchain as its official ledger. At the time, tokenized Treasuries were still a fringe narrative, with most institutions taking a wait-and-see approach.

Breakthrough (2024): In March 2024, BlackRock officially launched the BUIDL fund, with Securitize as transfer agent. Within two years, assets under management grew from zero to over $2.5 billion. BlackRock’s entry was seen as a major endorsement of on-chain finance by the traditional asset management industry. That same year, Ondo Finance switched the underlying asset of its OUSG product to the BUIDL fund, establishing a "protocol-level distribution + institutional-level issuance" partnership.

Boom (Nov 2025–May 2026): Token Terminal data shows that the tokenized Treasury market on Ethereum grew from about $4 billion in November 2025 to $8 billion in May 2026, nearly doubling in six months. Total cross-chain tokenized Treasury TVL now exceeds $14 billion, with Ethereum accounting for the largest share at about $8 billion.

A noteworthy milestone occurred on May 6, 2026: Ondo Finance, together with JPMorgan’s Kinexys blockchain platform, Mastercard, and Ripple, completed a cross-bank, cross-border OUSG redemption settlement trial on XRP Ledger. The transaction used Ripple’s RLUSD stablecoin for asset-side settlement on the public blockchain, while fiat settlement was routed through Mastercard’s multi-token network to JPMorgan’s Kinexys platform. Though a pilot, this event marked the first time issuance, trading, and bank settlement for tokenized Treasuries were connected in a real-time, end-to-end chain.

Three Survival Strategies in One Sector

Scale Distribution: Dominance and Ecosystem Nesting

Using Ethereum’s $8 billion tokenized Treasury market as a baseline, BlackRock’s BUIDL holds about $2.5 billion, making it the largest single product. Ondo Finance’s OUSG holds about $610 million (Ondo website data), and USDY’s current TVL is about $2.14 billion, totaling $2.75 billion. Ondo’s overall protocol TVL—including tokenized equities and other non-Treasury assets—has reached about $3.7 billion, with OUSG and USDY forming the backbone of its on-chain yield assets.

Franklin Templeton’s BENJI suite (FOBXX) had about $1.98 billion in AUM as of April 29, 2026. On Stellar, FOBXX operates via BENJI tokens, with over $650 million in AUM on Stellar as of April 2026, making it the second largest real-world asset (RWA) on that blockchain. Franklin Templeton’s total AUM is about $1.7 trillion (per third-party reports), with on-chain products representing a tiny fraction.

BlackRock’s total AUM is about $13.89 trillion (as of March 31, 2026), with BUIDL’s $2.5 billion constituting just an experimental product within its vast ecosystem.

Protocol Ecosystem: 153 Partners vs. Traditional Fund Systems

RootData’s analysis shows that Ondo Finance has built an ecosystem of 153 partners, spanning traditional finance, public blockchains, custodians, DeFi, exchanges, wallets, cross-chain bridges, payment providers, and service vendors. This demonstrates how Ondo evolved from a single Treasury yield product to an RWA infrastructure platform in just three years. In traditional finance, BlackRock, Franklin Templeton, Fidelity, Goldman Sachs, JPMorgan Chase, Mastercard, and PayPal are among its partners. On the liquidity side, Ethereum, Solana, Sui, Aptos, and DeFi protocols like Pendle, Morpho, Curve, 1inch, and Euler form its network.

By contrast, BlackRock and Franklin Templeton’s on-chain Treasury products mainly rely on their own extensive traditional fund operations.

Structural Differences in Yield Mechanisms

The three products fundamentally differ in how they deliver returns. OUSG reflects cumulative yield through token price appreciation: the redemption rate rises over time, but this mechanism can cause returns to appear as periodic jumps rather than linear accrual. BUIDL uses daily accrual and monthly on-chain dividends, with over 90% of its stablecoin-backed assets relying on its support—this has been confirmed by industry reports. Franklin Templeton’s BENJI offers daily on-chain dividends, and is the only money market fund providing real-time, per-second accrual, operating 365 days a year, including weekends and holidays.

Differences in yield distribution also affect how market value is assessed. Products using price appreciation can more directly reflect cumulative returns in their nominal market cap, while dividend-based products may understate actual asset scale.

Three Institutions, Three Stories

Ondo’s Market Narrative

There are several core narratives around Ondo Finance. First, the high-profile partnership and integration story: the four-party cross-border redemption pilot in May 2026 drew widespread attention, with the market viewing it as a "milestone for institutional-grade infrastructure." Second, market share: RootData shows Ondo holds about 58%–80% of the tokenized equities market. Third, the ETF narrative: On February 6, 2026, 21Shares filed a prospectus with the SEC for the 21Shares Ondo Trust, proposing a spot ETF holding ONDO, to be listed on Nasdaq with Coinbase Custody as custodian.

But each narrative requires scrutiny. The four-party pilot was a technical proof-of-concept, and its commercial scalability and routine usage remain uncertain. High market share figures must be understood in the context of tokenized equities—a niche with about $1 billion TVL, still small compared to the $8 billion tokenized Treasury market. The ETF application is pending, with an uncertain outcome.

Executive Perspective: Utility Over Hype

At Consensus Hong Kong in February 2026, senior executives from Ondo and Securitize emphasized that "utility, not hype," will drive the next phase of tokenization. Graham Ferguson, Head of Ecosystem at Securitize, stated: "The biggest challenge is communicating with exchanges and DeFi protocols to help them understand the requirements for compliance as regulated entities."

Min Lin, Ondo’s Global Expansion Managing Director, highlighted: "Current tokenized Treasuries are just a small slice of the potential market," and noted that using tokenized equities and ETFs as collateral for DeFi perpetual contracts "greatly enhances the capital efficiency and utility of these token assets." These top-level voices reflect a consensus: the technical architecture is ready, but distribution channels, compliance interfaces, and real-world use cases are the bottlenecks for the next phase.

Structural Disconnect Between Protocol Growth and Token Performance

DeFiLlama data shows Ondo Finance’s TVL grew from about $534 million in 2024 to $3.7 billion in 2026. However, Gate market data indicates that as of May 12, 2026, the ONDO token price was $0.4363, up 1.8% in 24 hours, but well below its historical peak. According to third-party data (as of March 22, 2026), ONDO’s circulating supply is about 999.7 million tokens, giving it a market cap of roughly $436 million at current prices.

This gap between robust protocol TVL growth and relatively weak token performance may reflect several structural factors: first, the major token unlock on January 18, 2026, when about 1.94 billion ONDO tokens entered circulation, comprising 57–60% of the circulating supply at the time. Second, the value capture mechanism for governance tokens in the tokenomics is not directly linked to protocol revenue. Third, the market is more focused on institutional partnership narratives, while the token’s economic model and real-world utility remain less transparent.

Conclusion

As of May 2026, Ethereum’s tokenized Treasury market has surpassed $8 billion and doubled in six months, marking the transition of on-chain risk-free yield assets from "experimental" to a bona fide new asset class. Yet, the competitive structure is not a simple equilibrium: BlackRock’s BUIDL dominates with about $2.5 billion, Ondo stands out as the most prominent protocol-layer distributor of BlackRock’s product, and Franklin Templeton, as the earliest entrant, maintains an independent on-chain product line. Its BENJI suite, with about $1.98 billion in AUM and five years of operation, remains a formidable competitor.

These three institutions represent three distinct survival strategies within the same sector: the "asset issuance" path of traditional giants entering the fray, the "distribution and integration" path of crypto-native protocols, and the "independent on-chain exploration" path of traditional asset managers. The future direction of the sector will hinge on a key variable: as BlackRock accelerates its own distribution capabilities, can Ondo prove it’s not just BlackRock’s on-chain "dealer," but a truly indispensable layer of RWA infrastructure?

The $8 billion in tokenized Treasuries is just a fraction—less than 0.03%—of the $28 trillion U.S. Treasury market. With technology, regulatory frameworks, and market demand still in the calibration phase, every industry participant—large or small—is still at the starting line of a marathon.