Tokenized Treasury Bills: Are BlackRock BUIDL, Ondo, and Hashnote Actually Safer Than a Bank?

The $8 Billion Question

In March 2024, BlackRock — the world's largest asset manager — launched a tokenized US Treasury fund called BUIDL on Ethereum. Within 40 days it hit $375 million. Within two years it crossed $2.9 billion. The category it kicked off — tokenized short-duration Treasuries — now holds more than $8 billion across issuers and has become the single most important proof-of-concept for real-world asset tokenization.

The pitch is simple: the safest yield-bearing instrument in the world (US T-bills), wrapped in a programmable token, with 24/7 transferability and none of the banking-system intermediation risk that surfaced during the 2023 regional bank failures. A better stablecoin, effectively.

But the reality is more nuanced. Not every tokenized Treasury product is the same. Access, fees, redemption mechanics, custody models, and regulatory status vary meaningfully between issuers. This guide breaks down the three dominant products — BlackRock BUIDL, Ondo OUSG / USDY, and Hashnote USYC — on the dimensions that actually matter to an investor or treasurer deciding where to park idle dollars.

For a foundational primer on how tokenization works more broadly, start with our real-world asset tokenization guide.

What a Tokenized T-Bill Actually Is

A tokenized Treasury product has three layers:

1. The underlying fund — a legal entity (usually a Delaware LLC or Cayman LP) that holds actual US Treasury bills and overnight repurchase agreements at a traditional custodian like BNY Mellon or State Street.
2. The transfer agent and token issuer — a firm like Securitize (BUIDL), Ondo (OUSG/USDY), or Hashnote itself, that manages the investor registry on-chain.
3. The ERC-20 (or equivalent) token — a smart contract that represents fund shares, with transfer restrictions enforced at the contract level through an allowlist.

When you buy, USD or USDC flows to the fund, the fund buys T-bills, and tokens are minted to your whitelisted wallet. When you redeem, tokens are burned, the fund sells T-bills, and dollars (or stablecoins) return to you — typically T+0 to T+2.

The yield comes from the T-bills themselves. In 2026 that is tracking roughly the 4-week bill yield, currently around 4.9 percent, minus issuer fees.

The Three Leaders Compared

Numbers drawn from rwa.xyz, issuer websites, and SEC filings as of Q1 2026. Verify before acting.

BlackRock BUIDL

The flagship product. BUIDL is structured as a Delaware LLC under the BlackRock USD Institutional Digital Liquidity Fund, with Securitize as the transfer agent and BNY Mellon as custodian. It is the institutional benchmark — if a Treasury department tokenizes cash, BUIDL is usually the first option considered.

Strengths

• BlackRock-level brand and balance sheet credibility.
• Deepest on-chain liquidity and deepest integrations — Circle uses BUIDL in USDC reserve management, Frax uses it to back frxUSD, Ondo uses it to back OUSG.
• 24/7 redemption via Circle's approved market maker channel — you can redeem BUIDL into USDC instantly through Circle Mint.

Weaknesses

• $5M minimum locks out everyone but the largest treasuries and funds.
• 0.20 percent fee is competitive but not the lowest.
• The admin controls are extensive — BlackRock can pause, freeze, and claw back in specific scenarios. This is standard for regulated products but it is not DeFi.

Ondo OUSG (and USDY)

Ondo Finance built its business on repackaging institutional-grade yield for crypto-native investors. OUSG is the accredited-investor product, which holds BUIDL and other short T-bill ETFs. USDY is the non-US retail product, which wraps a different underlying pool and carries a slightly lower fee.

Strengths

• USDY is one of very few ways for non-US retail investors to access T-bill yield on-chain with a low minimum ($500).
• Strong multi-chain presence including Solana and Sui.
• OUSG is positioned as an institutional DeFi collateral asset — accepted on Flux Finance, Aave Arc, and several institutional CLOBs.
• Transparent monthly attestations from independent auditors.

Weaknesses

• USDY is not available to US persons, full stop.
• OUSG's reliance on BUIDL introduces a second layer of counterparty exposure.
• Regulatory uncertainty around USDY specifically — non-US jurisdictions have varying stances.

Hashnote USYC

Hashnote is the quietly important one. Hashnote was acquired by Cumberland / DRW, which gives it deep market-making infrastructure. USYC is the most DeFi-integrated of the three, with direct plumbing into centralized exchanges (it is collateral on Deribit, OKX, and Bybit for institutional accounts).

Strengths

• Institutional market-making infrastructure means tightest redemption.
• Accepted as margin collateral on several major derivatives venues — a major practical advantage for trading firms.
• Yield is often a few basis points higher than BUIDL or OUSG.

Weaknesses

• Fees are 10 bps higher than Ondo and BlackRock.
• Smaller chain footprint (Ethereum and Canton only).
• Less public transparency than BlackRock — you are relying more on Hashnote's audits and disclosures.

Are They Actually Safer Than a Bank?

This is the question that gets people into trouble. The answer has three parts:

Credit Risk

US bank deposits carry credit risk on the bank. Above the FDIC cap of $250K, you are an unsecured creditor. Silicon Valley Bank, Signature, First Republic all demonstrated that the cap matters.

Tokenized T-bills carry credit risk on the US Treasury. That is currently the highest-rated sovereign credit in the world, substantially safer than any bank.

For amounts above $250K, tokenized T-bills are genuinely safer from a credit perspective.

Operational Risk

Here the picture flips. Banks have FDIC insurance, Regulation E, Reg CC, FedWire, and three decades of operational maturity. Tokenized Treasury products have:

• Smart contract risk — exploitable bugs, though all three leaders use audited contracts with admin pause.
• Custodian risk — the actual T-bills sit at BNY Mellon, State Street, or similar. This is well-understood.
• Transfer agent risk — Securitize, Ondo, or Hashnote itself could have operational failures.
• Whitelist risk — you depend on the issuer's KYC system continuing to recognize your wallet.
• Chain risk — if Ethereum itself has a reorg or major failure, redemption could be delayed.

For operational reliability, banks still win. The Federal Reserve's Governor Waller speech on tokenization in 2024 laid out these trade-offs clearly — it remains the best regulator-level summary.

Regulatory Risk

BUIDL, OUSG, and USYC are structured under existing regulated frameworks (Reg D 506(c), Cayman, Delaware). This is robust but not bulletproof. The SEC continues to clarify the boundary between "security token" and "crypto asset" and could force structural changes. The recent FSB Global Monitoring Report on NBFI covers tokenized fund risks in detail.

How They Compare to Stablecoins

This is where it gets interesting for Treasury teams.

USDT and USDC earn yield for the issuer (Tether reportedly made $6B+ profit in 2024). Tokenized T-bills pass that yield to the holder. For idle balances above $1M, the rational answer is often a tokenized Treasury product.

That said, stablecoins remain the universal settlement layer. Most treasuries in 2026 hold a mix — operational liquidity in USDC, reserves in BUIDL or OUSG. For a full breakdown of the stablecoin landscape see our stablecoins explained guide.

Practical Decision Matrix

You have under $100K to deploy.

• If you are a US person — consider a high-yield savings account, Treasury Direct, or an MMF. Tokenized products are not realistically accessible yet.
• If you are non-US — USDY is the cleanest option.

You have $100K to $5M and are an accredited / eligible investor.

• Ondo OUSG offers the best access-to-liquidity ratio.
• Hashnote USYC if you also want derivatives margin utility.

You have $5M+ and are a qualified institution.

• BlackRock BUIDL is the institutional default.
• Add USYC if you trade derivatives.
• Add USDY exposure for non-US segments.

You are a DAO or on-chain treasury.

• BUIDL (via Circle Mint) or OUSG are the defaults. Many DAOs use Superstate USTB or MakerDAO's RWA vaults as alternatives.
• Always check whether your governance process can handle the whitelist requirement.

If you are evaluating specific RWA issuers beyond these three, our how to vet RWA tokenization firms before investing covers the due-diligence checklist.

The Risks People Under-Weight

Regulatory shift. A change in the SEC's posture or FASB's accounting treatment could materially affect the utility of these tokens for US corporate treasuries. The current light-touch environment is not guaranteed.

Whitelist opacity. If your wallet is deplatformed — sanctions, compliance, or mistaken identity — you cannot transfer your tokens. Your recourse is redemption, not transfer. For most holders this is a non-issue; for some it is fundamental.

Yield curve risk. These are 4-week T-bill products. When the Fed starts cutting — and the market in April 2026 prices in two cuts by year-end — yields will drop in lockstep. The yield is not locked in.

Single-chain concentration. If you hold BUIDL on a single chain and that chain has an extended outage, your redemption is delayed. Multi-chain holdings or using Circle Mint as an exit ramp mitigate this.

The Atlantic Council GeoEconomics CBDC Tracker also notes that CBDC adoption could eventually compete with tokenized Treasuries for institutional settlement — a multi-year watch item.

The Bottom Line

Tokenized Treasuries are not a crypto gimmick. They are an incremental but genuinely useful upgrade on money market funds — same underlying asset, better rails, same yield, marginally more risk in the wrapper. For treasurers and institutional allocators sitting on idle dollars, the 4.5 to 5.2 percent yield is not something to leave on the table because the product is new.

For retail, the story is more limited. US retail can access this yield only through stablecoins that happen to hold these tokens in reserve. Non-US retail has USDY.

For the full picture of real-world asset tokenization beyond Treasuries, see our pillar guide: [Real-World Asset Tokenization Guide 2026](/blog/real-world-asset-tokenization-guide-2026).