From stablecoin treasury to Tokenized money market funds as collateral
Author: Philip Filhol, Senior Business Development Manager at 21X
Anyone who takes Web3 treasuries seriously today must accept a structural reality: Capital, risk and short-term liquidity needs are split across on-chain and off-chain environments.
On-chain, treasuries hold stablecoins and crypto assets in wallets, manage risk and liquidity through smart contracts, and settle transactions continuously on public blockchains. Off-chain, conservative yield instruments and balance-sheet-grade liquidity remain embedded in traditional money market funds, custody structures and fiat-based settlement processes.
What has long been missing is regulated, wallet-native access to conservative yield instruments that remain within the on-chain operational flow and can be used directly as collateral, without a fiat off-ramp. This is precisely where a new market standard is now emerging: Tokenized money market funds, or tokenized notes on money market funds, combined with atomic settlement and an integrated primary and secondary market¹.
The core of this use case is not technical in nature. The decisive factor is the ability to allocate treasury liquidity in a yield-bearing manner while always keeping it fully mobilizable. Tokenized money market funds combine these two requirements for the first time within a structurally consistent framework and form the foundation for treasury-grade on-chain workflows².
The use case in practice: USMO on 21X
In May 2025, 21X opened the primary market for US Money (USMO), a tokenized note on the UBS (Irl) Select Money Market Fund – USD. The issue is being carried out via a Luxembourg securitization structure from Black Manta Capital Partners (BMCP) in cooperation with SBI Digital Markets (SBI DM). Subscription and redemption take place via the regulated market infrastructure from 21X, with settlement occurring natively in stablecoins³. This setup enables atomic, near-instant settlement and streamlines the value chain by reducing the need for traditional intermediaries, positioning the market infrastructure to support continuous, 24/7 access to institutional-grade liquidity as the operating model evolves.
The structure follows a clear institutional role model
BMCP is responsible for issuance and securitization, SBI DM handles tokenization, distribution and custody, and 21X provides the regulated trading and settlement system. Tradevest has been appointed as market maker to ensure liquidity in the secondary market⁴.
This combination is a prerequisite for treasury suitability, with regulated issuance, insolvency-proof structure, secondary market liquidity and stablecoin-based settlement in an end-to-end setup³⁴.
Tokenized money market funds as collateral primitives
The Bank for International Settlements describes tokenized money market funds as a rapidly growing component of the on-chain financial infrastructure. The added value lies less in the asset itself than in its portability and collateral capability. Tokenized money market funds can be held in wallets, transferred in near real-time and used as collateral in downstream credit and derivatives processes.
Key market insights from the BIS analysis:
- The volume of tokenized money market funds under management rose from around USD 770 million at the end of 2023 to just under USD 9 billion in October 2025⁵
- Around 50% of the volume is now on Ethereum, following an early phase with a stronger focus on Stellar⁵
- Usage is highly concentrated: in individual funds, a small number of wallets hold the majority of the volume⁵
These data underscore that tokenization alone is not enough. Without market structure, liquidity and clear secondary market rules, collateral mobility remains limited.
Why primary-only fails
Many tokenization approaches are limited to digital subscription and redemption. This is insufficient for treasury applications. Liquidity that is only available via redemption prevents intraday rebalancing and complicates active collateral management.
21X is already actively bridging this structural deficit. As the company states in its market commentary:
“True efficiency gains in tokenized markets only emerge when issuance, trading, and settlement are combined on a single regulated DLT-based market infrastructure.”⁷
The decisive lever is therefore not the token itself, but the connection between the primary market, secondary market, and settlement.
Secondary market liquidity as a prerequisite
Secondary market liquidity is not an additional feature, but a basic prerequisite for treasury usability. Without reliable pricing and tradable positions, a tokenized instrument remains effectively tied up.
Tradevest emphasizes this point in connection with its role as a market maker on 21X:
“Secondary market liquidity is essential to ensure that tokenized instruments function as usable treasury assets rather than long-term locked positions.”⁴
This shows clearly that only through active market making can a tokenized product become an operationally usable treasury instrument.
Connectivity to DeFi and institutional credit markets
The use of tokenized money market and treasury products as collateral is no longer a theoretical scenario. With Horizon, Aave describes a real-world assets (RWA) lending initiative in which tokenized government bonds and money market instruments are used as collateral⁸. Just a few months after its launch, the program recorded:
- Over USD 450 million in net deposits
- around USD 135 million in borrowing volume⁸
At the same time, Visa argues in its own analysis that on-chain lending has long since reached relevant volumes. Over a period of five years, stablecoin-based loans totalling over USD 670 billion were processed⁹.
These developments show that collateral is becoming a product in its own right. And this product needs regulated, liquid markets.
Treasury pressure from the Web3 environment
A study by the Blockchain Research Lab on the 20 largest DAO treasuries shows that over 80% of assets are held in native DAO tokens ¹³, with correspondingly high volatility. The structural pressure to diversify into stable, yield-bearing real-world assets is obvious.
Boston Consulting Group (BCG) estimates the volume of tokenized funds outlines a scenario of more than USD 600 billion by 2030 if just one percent of the global fund market were to be tokenized.
Conclusion
The USMO use case shows how on-chain treasury management is becoming more professional: stablecoin-based treasury remains on-chain, excess liquidity is allocated to a conservative, institutional underlying and can be used as collateral at the same time. It is not the token that is decisive, but the market structure.
21X positions itself as a regulated infrastructure that brings together the primary market, secondary market, trading, and settlement, thereby creating exactly the conditions that treasury and collateral processes need today³⁴⁷.
If you would like to evaluate this use case for your treasury or product strategy, the experts at 21X are happy to assist you. Together, we will analyze how tokenized cash and collateral workflows can be implemented in a way that is regulatory compliant, operationally efficient, and future-proof.
References
- MarketsMedia, tokenized UBS fund opens for subscription on 21X, 2025
- World Economic Forum, Asset Tokenization in Financial Markets, 2025
- 21X, Tokenized Note on UBS Money Market Fund opens for subscription on 21X, 2025
- 21X, Tradevest appointed as market maker on the 21X Digital Asset Exchange, 2025
- Bank for International Settlements, The rise of tokenized money market funds, BIS Bulletin No. 115, 2025
- Investment Association, MMF Tokenization – Collateral Opportunities, March 2024
- 21X, Market Commentary / Press Release on DLT-based Market Infrastructure, 2025
- Aave, Introducing Horizon: Institutional RWA Markets, 2024
- Visa, Stablecoins beyond payments: the on-chain lending opportunity, 2025
- Blockchain Research Lab, The State of DAO Treasuries, October 2023
- Boston Consulting Group, Tokenized Funds – The Third Revolution in Asset Management, 2024
- PwC, Global Crypto Regulation Report 2025, 2025
- Schellinger, Fiedler & Steinmetz (2023) How Are You DAOing? The State of DAO Treasuries. SSRN. url: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4604968
