The tokenised Treasury market's growth story has quietly changed shape. The interesting number is no longer assets under management but utility: how many venues will accept an on-chain money-market share as margin.
Products from BlackRock and Securitize, Franklin Templeton, Ondo and Superstate are now used as collateral across a growing set of institutional venues and DeFi credit markets. For a desk running basis trades, the difference between margin that yields and margin that does not is straightforwardly material.
Where the risk actually sits
The credit risk is familiar and small; the operational risk is not. Redemption windows, transfer-agent processes and the legal enforceability of on-chain transfers all vary between issuers, and a token that cannot be liquidated inside a margin call is not collateral.
Our desk treats these instruments the same way we treat commodity-backed tokens: the wrapper is only as strong as the redemption mechanics and the entity honouring them.
The settlement question nobody has answered
Accepting tokenised treasuries as margin assumes an operational path to liquidate them under stress, at speed, on a weekend. That path has not been tested in a real dislocation.
Until it is, conservative haircuts are appropriate, and the venues applying them are behaving sensibly rather than timidly.
