{"id":24904,"date":"2025-06-25T12:04:41","date_gmt":"2025-06-25T09:04:41","guid":{"rendered":"https:\/\/forklog.com\/en\/moodys-warns-of-risks-from-the-tokenisation-of-us-treasuries\/"},"modified":"2025-06-25T12:04:41","modified_gmt":"2025-06-25T09:04:41","slug":"moodys-warns-of-risks-from-the-tokenisation-of-us-treasuries","status":"publish","type":"post","link":"https:\/\/forklog.com\/en\/moodys-warns-of-risks-from-the-tokenisation-of-us-treasuries\/","title":{"rendered":"Moody\u2019s warns of risks from the tokenisation of US Treasuries"},"content":{"rendered":"

The growing use of yield-bearing tokenised US Treasuries as collateral for margin trading is opening \u201cnew channels of risk transmission\u201d between markets, Cointelegraph<\/a> reported, citing Moody\u2019s.<\/p>\n

<\/p>\n

Experts say the trend also raises the likelihood of \u201ccascading effects\u201d in decentralised finance (DeFi).<\/p>\n

Tokenisation converts real-world assets into digital tokens on a blockchain. In the case of Treasuries, such coins represent on-chain claims on government debt and can be viewed as an alternative to money-market fund shares. The combined capitalisation of tokenised securities is about $7.4bn.<\/p>\n

\"Snimok-ekrana-2025-06-25-102859\"
Data: RWA<\/a>.<\/figcaption><\/figure>\n

Most RWA assets have been issued on Ethereum:<\/p>\n

\"RWA2\"
Data: RWA<\/a>.<\/figcaption><\/figure>\n

Moody\u2019s June report notes that short-term liquidity funds are considered low-risk assets, but they are not entirely safe:<\/p>\n

\n\u201cTokenised liquidity funds, in addition to the traditional risks inherent in short-term investment instruments and money-market funds\u2014such as credit, interest-rate and liquidity risks\u2014are subject to additional threats associated with the use of new technology.\u201d<\/cite><\/p><\/blockquote>\n

One such risk relates to margin trading, which uses the LTV<\/span> ratio\u2014the ratio of borrowed funds to collateral. If the value of the collateral falls below a set threshold, the position is either liquidated automatically or the trader is notified to post additional collateral.<\/p>\n

In June, exchanges Deribit and Crypto.com were among the first to begin<\/a> accepting tokenised US Treasury funds as collateral for leveraged trading. Both platforms integrated BUIDL<\/a>\u2014a money-market instrument from BlackRock tokenised with the participation of Securitize.<\/p>\n

\"BUIDL\"
BUIDL\u2019s assets under management are approaching $2.9bn. Data: RWA<\/a>.<\/figcaption><\/figure>\n

In a presentation to the Treasury Borrowing Advisory Committee, US Treasury officials noted<\/a> that tokenisation could become a channel for transmitting volatility to traditional markets as such assets grow. In stress, the \u201cseamless interconnectedness of ledgers\u201d could amplify negative effects\u2014widespread sell-offs and deleveraging<\/span> could \u201cquickly spread to other asset classes\u201d.<\/p>\n

Holders of tokenised Treasuries face a number of additional risks, including de-dollarisation<\/a> in foreign countries, changes in fiscal policy, potential liquidity issues, shifts in rates, and so on.<\/p>\n

Zumo founder Nick Jones told the outlet that caution is needed to avoid systemic failures.<\/p>\n

\n\u201cEffective risk management, expected tightening of regulation and transparency will be key factors in reducing risks amid the convergence<\/span> of traditional and decentralised finance,\u201d the expert noted.<\/cite><\/p><\/blockquote>\n

A new phase<\/h2>\n

Tokenised Treasuries are becoming a key instrument for institutional investors moving into on-chain finance. Yet, against growing risks tied to US fiscal policy and geopolitical instability, market participants are increasingly considering gold and property in RWA form as alternative stores of value.<\/p>\n

Treasury yields jumped after US President Donald Trump announced \u201cliberation tariffs\u201d<\/a>. Investors responded by selling government bonds.<\/p>\n

\n\u201cUltimately, bond yields depend on the government\u2019s ability to pay its debts. As its creditworthiness declines, yields rise,\u201d said<\/a> economist and author of the book \u201cThe Bitcoin Standard\u201d Saifedean Ammous.<\/cite><\/p><\/blockquote>\n

Inflation, geopolitical tension and growing doubts about US creditworthiness have strengthened demand for RWA backed by real estate, gold and other exchange-traded commodities.<\/p>\n

\"Comm\"
The tokenised commodities segment has surpassed $1.5bn. Data: RWA<\/a>.<\/figcaption><\/figure>\n

\n\u201cTokenised Treasuries give institutions a way to deploy capital into low-risk, yield-bearing assets. However, that is not enough for investors in such funds,\u201d said RAAC founder Kevin Rusher.
<\/cite><\/p><\/blockquote>\n

He also noted that the next stage of the RWA segment will be the tokenisation of physical assets. In particular, real estate can provide a stable cash flow.<\/p>\n

Tokenised gold can be used to generate yield through lending mechanisms. Such assets also work as collateral for sourcing liquidity in DeFi.<\/p>\n

Since the start of 2024, the capitalisation of the RWA segment has grown by more than $100bn<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

The growing use of yield-bearing tokenised US Treasuries as collateral for margin trading is opening \u201cnew channels of risk transmission\u201d between markets, Cointelegraph reported, citing Moody\u2019s.<\/p>\n","protected":false},"author":1,"featured_media":24903,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"","news_style_id":"","cryptorium_level":"","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[1282,1825,1308],"class_list":["post-24904","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-asset-tokenization","tag-moodys","tag-rwa"],"aioseo_notices":[],"amp_enabled":true,"views":"56","promo_type":"","layout_type":"","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/24904","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/comments?post=24904"}],"version-history":[{"count":0,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/24904\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media\/24903"}],"wp:attachment":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media?parent=24904"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/categories?post=24904"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/tags?post=24904"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}