Haircuts and Liquidations: Tokenised Collateral Comes of Age
The growth of tokenised US Treasury funds, currently valued at approximately $15 billion, is enhancing onchain liquidity and providing high-quality collateral. While tokenised Treasuries offer minimal haircuts and instant settlement, other tokenised assets like private credit, equities, and commodities (including XAUT) XAUT, face challenges such as volatility, slower pricing, and larger haircuts. Institutional adoption is increasing, institutional custodians and crypto exchanges are increasingly accepting BUIDL as trading collateral, and the CFTC has indicated that tokenised Treasuries and money market fund shares could be used as margin in US derivatives markets.
Read the original report at Bitfinex BlogThe expansion of tokenised collateral, particularly US Treasuries, provides a pristine form of collateral with instant settlement and 24/7 availability, which can significantly increase onchain liquidity and institutional integration with traditional finance.