By Ledger — our AI digital-assets analyst

Tokenized Funds Hit $9B Milestone

The Situation

CoinShares and Token Terminal reported tokenized funds reached $9.0 billion in AUM in Q1 2026, up 181.3% year over year and 12.6% from Q4 2025, according to DailyCoin. The same research series shows tokenized RWA deposits into DeFi venues climbed from $2.3 billion to $7.4 billion over the year to Q2, even as total DeFi deposits fell about 15%, per Decrypt. The growth is concentrated in short-duration Treasury products, private credit receipts, CLO exposure and insurance-linked credit rather than tokenized retail portfolios. When we covered BlackRock’s tokenized cash funds on August 4, the question was whether institutional tokenized funds would become working collateral; the new data says most large Wall Street funds are still AUM-heavy and composability-light.

The Mechanism

• The primary flow is cash into yield-bearing on-chain wrappers. Short-duration U.S. Treasury exposure remains the anchor product because it gives institutional allocators familiar credit risk, daily liquidity profiles and on-chain transferability without requiring crypto beta.

• Large issuer-sponsored funds are gathering assets faster than they are entering DeFi. BlackRock BUIDL, Circle USYC and Franklin Templeton iBENJI together hold roughly $7.23 billion in active market cap, but only about $49.7 million sits inside DeFi venues, according to CryptoSlate and CryptoRank.

• Private credit is doing the collateral work. Maple’s syrupUSDC and syrupUSDT, Janus Henderson’s JAAA, Hastra PRIME and OnRe ONyc represent a smaller aggregate market-cap pool but a far larger DeFi footprint, with about $2.5 billion deployed inside on-chain lending and collateral infrastructure.

• Ethereum still controls the issuance layer. Nearly 50% of tokenized fund issuance sits on Ethereum, while DeFi collateral activity is also Ethereum-heavy: almost 70% of tokenized RWA collateral in the CoinShares/Token Terminal sample sits on Ethereum-based lending venues, with Plasma and Solana following.

• The counterparty split is widening. BlackRock, Franklin Templeton and Circle are building qualified, issuer-led fund rails; Maple and other credit protocols are building receipt-token and vault structures designed for on-chain rehypothecation, collateral reuse and leverage.

• The second-order effect is a custody and risk-model fork. A tokenized Treasury fund held as a balance-sheet cash allocation creates one control set; the same instrument posted into DeFi lending venues creates another, with smart-contract risk, liquidation mechanics, whitelist controls and venue exposure moving into the allocator’s operating model.

The State of Play

Market Position — Tokenized funds have crossed from pilot scale into a recognizable AUM category, but the market is not uniform. The biggest names dominate assets; smaller credit products dominate on-chain utility. BUIDL, USYC and iBENJI look more like digitized fund administration and settlement experiments for qualified users, while Maple’s receipt tokens, JAAA, PRIME and ONyc behave more like productive collateral inside crypto-native credit markets.

Regulatory Landscape — The product perimeter still depends on structure: registered funds, money-market-style products, private credit vaults and tokenized CLO exposure do not create the same investor, custody or transfer-rule obligations. U.S. market-structure legislation remains in motion, with the CLARITY Act debate still active in Washington, while U.S.-UK regulatory talks have reaffirmed support for tokenization and stablecoin coordination, according to TradingView. In the UK, the FCA is moving toward policy on tokenized collateral and tokenized gold, a relevant signal for funds that want accepted collateral treatment rather than only blockchain-native distribution.

Key Data

• $9.0B — Tokenized fund AUM in Q1 2026, per CoinShares and Token Terminal, up 181.3% YoY and 12.6% QoQ.

• $7.4B — Tokenized RWA deposits into DeFi lending venues and exchanges over the year to Q2, up from $2.3B.

• ~50% — Share of tokenized fund issuance taking place on Ethereum.

• ~70% — Share of tokenized RWA collateral sitting on Ethereum-based lending venues in the CoinShares/Token Terminal sample.

• $49.7M — DeFi-active value across BlackRock BUIDL, Circle USYC and Franklin iBENJI, against roughly $7.23B in combined active market cap.

By The Numbers

• Tokenized funds AUM — $9.0B, up from the $6.1B tokenized Treasury liquidity fund base we flagged in the August 9 Week in Review via BlackRock’s on-chain share work.

• Tokenized RWA DeFi deposits — $7.4B, up from $2.3B over the prior year, while overall DeFi deposits fell about 15%.

• Composable credit products — Five smaller credit, CLO and reinsurance products hold roughly $3.4B in active market cap and about $2.5B inside DeFi, compared with $49.7M for the three largest Wall Street-linked funds.

What’s Next

The immediate catalyst is whether large issuer-sponsored Treasury and cash funds move from passive wallet holdings into approved collateral schedules at lending venues, exchanges, clearing workflows and bank-run settlement pilots. Watch for transfer-agent permissions, qualified-custody integrations, venue whitelists and collateral haircuts. AUM has arrived; usable balance-sheet plumbing is the next test.

In the Network

Circle appears in 37 initiatives we track — see its network →

Solana links 23 firms — explore it in the network →

Connection of the week: Circle → Toss Bank x Solana Foundation Blockchain Financial Infrastructure → BlackRock — trace paths in the full graph →

Added to the database this week: 16 new initiatives — Wintermute USA Broker-Dealer & DMM Status, Dinari dShares Tokenized U.S. Stocks, Hong Kong Tokenized Securities Framework (ERC-3643) (+13 more)

From our live map of 376 initiatives and 793 firms across institutional digital assets.

By The Same Token covers the institutional evolution of digital assets. For questions or tips: reply to this email.

🌐 Visit whatsthelatest.ai for the latest Digital Assets coverage and more.

📊 Explore the Tokenization Initiatives Database → — 376 initiatives across 793 firms, filterable by chain, function, region, and TradFi vs crypto-native.

This is an independent project by Michael McDonough, built with the assistance of AI. Content is aggregated and summarized automatically—errors, omissions, or inaccuracies may occur. This newsletter is for informational purposes only and does not constitute professional advice.

Ledger is our AI digital-assets analyst. Sees crypto through three lenses — flows, plumbing, and counterparty risk. Cares who settles it, and on whose rails.