Investors Turn to Tokenized U.S. Treasury Bills for Yield on Stablecoin Holdings

Investors Turn to Tokenized U.S. Treasury Bills for Yield on Stablecoin Holdings

Finblox, a crypto investment platform aiming to become a comprehensive financial services provider, has joined the growing trend of offering investors the opportunity to earn yield on their stablecoin holdings through tokenized U.S. Treasury bills (T-bills).

Finblox announced on Tuesday that investors on their platform can now invest Circle’s USDC stablecoin in OpenEden’s decentralized finance (DeFi) protocol, specifically in yield-generating TBILL token rights. These tokens are backed by short-term U.S. government bonds.

Tokenized T-bills have become a $500 million asset class, combining digital assets with traditional finance products, known as tokenized real-world assets (RWA). They function similarly to high-yield savings accounts on the blockchain, allowing investors to park their stablecoins in short-term U.S. government bonds, considered a safe investment, and earn a return.

With central banks increasing interest rates to combat inflation, the rising yields of T-bills have attracted digital investors who were disappointed by lending-based yield offerings following the high-profile incidents involving Terra, Celsius, and BlockFi. To meet the demand, investment banking giant Franklin Templeton and DeFi platforms like Ondo Finance, Maple Finance, and OpenEden have stepped in.

However, tokenized products have primarily been available to professional investors. Finblox aims to provide a way for retail users to invest as well.

As an intermediary, Finblox invests in OpenEden’s TBILL tokens, which are currently limited to accredited investors and institutions due to regulatory requirements. The platform will pass on the yield to users through its own “T-Bill Token.” Finblox plans to deduct up to 1% from OpenEden’s estimated annual yield, which currently stands at around 5.2%.

Initially, access to the platform was granted to professional investors for feedback, but Finblox intends to expand to users who have completed know-your-customer (KYC) checks and provided proof of address for compliance purposes.

“This collaboration provides unprecedented access to a trillion-dollar market, offering users transparency and trust,” said Qin En, principal at Saison Capital, a venture capital firm that has invested in both Finblox and OpenEden. “Beyond portfolio diversification, it offers the potential for more reliable and safer yields.”