Decentralized finance (DeFi) protocols designed for crypto assets are increasingly retooling for Wall Street, and VanEck’s tokenized Treasury fund arriving on lending platform Euler is the latest example of this shift.
Securitize (CEPT), the issuer and tokenization specialist behind VanEck’s VBILL Treasury fund, said on Thursday that the product is now available on Euler’s lending markets.
The move allows investors to use tokenized U.S. Treasuries as collateral to borrow and deploy liquidity elsewhere on-chain while maintaining compliance limits tied to the asset.
The move highlights how DeFi protocols are evolving as institutional investors move deeper into tokenized finance. Platforms once focused on permissionless crypto assets are beginning to rethink their architecture for regulated products such as tokenized money market funds and private credit.
Tokenized US Treasuries have become one of the fastest growing crypto sectors, surpassing $15 billion in assets, increasing 150% in a year, according to data from RWA.xyz. Global asset managers including BlackRock, Franklin Templeton and Janus Henderson have all launched blockchain-based treasury and money market products aimed at institutions seeking yield-bearing on-chain collateral.
But this still represents only a fraction of the potential that asset tokenization could achieve. Standard Chartered predicted $2 trillion in tokenized assets by 2028, while BCG and Ripple predicted a market size of $18.9 trillion by 2033.
Read more: Tokenization push could attract billions of dollars into DeFi, says StanChart
“What’s really exciting is that there are now protocols that want to integrate permissioned assets,” Securitize ecosystem manager Graham Ferguson told CoinDesk. “That’s something that wasn’t the case before.”
Euler, which currently has over $320 million in assets on its platform, pivoted earlier this year toward institutional use cases after initially operating as a completely permissionless lending protocol. Rival platform Aave also launched Horizon, its real-world assets platform focused on institutional borrowers and tokenized collateral.
Euler integrated Securitize’s DS protocol earlier this year, allowing tokenized securities to interact with lending markets while preserving investor eligibility requirements and transfer restrictions. Pricing data for VBILL is provided via RedStone oracles.
According to Securitize’s Ferguson, the challenge for DeFi protocols is balancing crypto’s open infrastructure with the compliance expectations of traditional financial companies.
“As more serious institutional investors explore the sector, they must benefit from certain protections and permissions that they are accustomed to in traditional finance,” Ferguson said.
“DeFi protocols are finally realizing that if they want to host in this capital, they are going to have to change their habits,” he added.
