Investors outside the United States are driving the rapid expansion of on-chain US government debt, with holders in Italy, Portugal, and Singapore commanding larger shares of tokenized US Treasuries than domestic buyers, according to the 2026 North America report from Chainalysis.
While the United States ranks fourth in total value at 10.5%, foreign buyers looking for yield and stability are absorbing a substantial portion of real-world asset (RWA) issuance on public blockchains.
Key Takeaways
- Tokenized Treasury debt grew 125% over the 12 months ending July 1, 2026, expanding from $6.86 billion to $15.42 billion.
- Italy holds 29.9% of geolocated value, followed by Portugal at 18.8% and Singapore at 18.2%.
- Japan accounts for the largest share of individual holders at 16.4%, but represents only 0.4% of total tokenized value.
- US government debt represents 42.8% of all tokenized RWA value globally.
Foreign Retail Drives Capital Out of Local Sovereign Debt
Tokenized Treasury products remove the necessity of establishing a US brokerage account and lower minimum investment barriers, allowing retail buyers in Europe and Asia to purchase wholesale debt directly. Chainalysis noted that a small group of large international holders controls the bulk of the market value, supported by a growing retail participant base.
BlackRock’s BUIDL fund reclaimed the top position among tokenized debt products in late August 2026. Notably, buyers tend to hold these assets rather than use them in decentralized finance applications. Treasury lending activity fell 23% over the period, representing the only RWA lending category to contract. As demand grows alongside macro shifts in US Treasury yields, Chainalysis observed that international buyers purchasing tokenized Treasuries generate direct demand for US sovereign debt over their local government options.
US Dollar Stablecoins Cement Dominance Overseas
Stablecoins backstopped by short-dated government paper serve as a secondary avenue funneling capital into US debt. US dollar-backed tokens represent 99.1% of all stablecoin order book volume. In contrast, euro-backed stablecoins account for just 0.45%, failing to gain traction despite regulatory implementation under the EU’s Markets in Crypto-Assets (MiCA) framework.
Circle reported that circulation of its USD Coin (USDC) reached $73.3 billion at quarter end, marking a 19% year-over-year increase. Global demand for dollar-denominated assets, which also competes with native stablecoin yield offerings, is visible in Canada as well. By June 2026, stablecoins accounted for 44% of Canadian dollar order book trading, up from 30% a year earlier, with USDC dominating the market.
Morva Rohani, executive director of the Canadian Web3 Council, highlighted that dollar stablecoin purchases siphon capital that domestic debt could otherwise capture, calling it a trend Canadian policy-makers are tracking closely. Although Canada’s Stablecoin Act received Royal Assent on March 26, 2026, supporting regulations remain pending, leaving local tokens unable to match US dollar market adoption.
Why It Matters
The flow of international capital into tokenized US Treasuries highlights how blockchain distribution expands access to safe-haven assets while reinforcing US financial dominance. By bypassing local sovereign bonds in favor of yield-bearing dollar tokens, foreign investors create structural capital flight away from domestic markets. Watching whether regulatory updates in Europe and Canada can bolster competitive local alternatives will show if tokenized real-world assets continue centralizing global liquidity into dollar instruments.
