How To Invest In Tokenized U.S. Treasury Bills? A Step-By-Step Guide

The tokenized treasury bills market is gaining momentum, exceeding $1 billion outstanding on public blockchains, primarily Ethereum. This innovative investment opportunity combines the stability of government-backed securities with the efficiency of blockchain technology.

What is tokenization? Read here.

This guide provides a step-by-step approach for beginners to learn about and invest in tokenized treasury bills.

What Are Tokenized Treasury Bills?

Tokenized treasury bills are digital representations of traditional U.S. Treasury bills on a blockchain. They are created when a financial entity purchases traditional T-bills and then issues tokens on a blockchain, like Ethereum or Bitcoin, that represent ownership of a portion of those T-bills.

These tokens (tokenized T-bills) can be traded, transferred, and held like cryptocurrencies. Essentially, it's like owning a piece of a U.S. Treasury bill, but instead of a paper certificate, you have a digital token.

Read more about tokenized Treasury bills here.

Step-By-Step Guide To Invest In Tokenized T-Bills

Step 1: Set Up a Digital Wallet

This is important because you need a place to store your tokenized assets.

Look for a user-friendly, secure cryptocurrency wallet that supports the blockchain where the tokenized T-Bills are issued (like Ethereum). Examples include MetaMask, Phantom, Ledger.

How to choose a crypto wallet? Read here.

Step 2: Get Cryptocurrency

You'll need cryptocurrency to purchase tokenized T-bills.

• Visit Transak: Head Transak or access the Transak On-Ramp via your favorite wallet or dApp.
• Verify Your Identity: Complete the quick registration and KYC process to comply with regulations.
• Choose Your Crypto: Select a stablecoin like USDC, which is widely used for tokenized assets due to its 1:1 peg to the U.S. dollar.
• Pay Securely: Use your preferred payment method to complete the transaction. Transak ensures competitive rates and transparent fees.

Step 3: Find A Platform Offering Tokenized T-Bills

Next, you need to know where to buy these assets.

Look for platforms or issuers that offer tokenized Treasury Bills. Examples include OpenEden or Franklin Templeton’s OnChain U.S. Government Money Fund. These platforms often have partnerships with established financial institutions.

Comparing Tokenized Treasury Bill Platforms

Platform	Minimum Investment	Fees	Supported Payment Methods
Ondo Finance	$5,000 for instant transactions, $100,000 for non-instant transactions	Not specified, but likely includes management fees and potentially transaction fees.	Bank account, debit card, wire transfer
OpenEden	Not specified	Not specified, but may include minting and redemption fees	Not specified
NexBridge	Not specified	Not specified	Not specified
Realize	Not specified	May charge a realization fee, up to 5% of the realization price	Not specified
BlackRock BUIDL Fund	$5,000,000	Management fees: 0.50%, Sales Commissions: $525,000	USD
Franklin Templeton OnChain U.S. Government Money Fund	$20	Management fees: 0.15%, Other expenses: 3.36%, Total annual fund operating expenses after fee waiver and/or expense reimbursement: 0.20%	USD, USDC

Step 4: Purchase Tokenized T-Bills

This is where you actually invest.

• Connect Your Wallet: On the platform offering tokenized T-Bills, connect your digital wallet. This usually involves selecting your wallet type and following prompts to connect.
• Understand the Offer: Before you buy, read about the terms of the tokenized T-Bills, including maturity, yield, and how interest is paid.
• Buy Tokens: Select the amount you wish to invest. The process is similar to buying cryptocurrency on an exchange; you'll confirm the transaction from your wallet.

Conclusion

Tokenized Treasury Bills could revolutionize how we think about government securities. They offer lower transaction costs, near-instant settlement times, and the potential to democratize access to what has traditionally been a high-barrier investment class.

Different platforms have different USPs. We suggest you do your own research before investing in any asset.