Overview
Every treasury desk runs the same trade-off: cash liquid enough to meet obligations, productive enough not to erode against inflation. Short-dated government paper has settled that tension for decades: Treasury bills, overnight repo, and the money market funds built on them. Safe, liquid, and understood by every auditor and regulator a company answers to.
What hasn't kept pace is the infrastructure they settle on.
The problem is the plumbing, not the asset
A money market position clears against a same-day cut-off, settles on a fixed cycle, and sits on a transfer agent's ledger no counterparty can see. None of that matters until cash has to move. At that point a position everyone agrees is liquid still takes a day or more to become spendable. The distance between liquid on paper and available to spend is where the cost sits.
Three costs, specifically:
Idle balances. Cash held back to cover a settlement window earns nothing while it waits.
Immobile collateral. A money market holding is a high-quality asset, but pledging it against an obligation elsewhere usually means selling it, moving the proceeds, and posting cash instead: several steps, at least a day, and the position stops earning the whole time.
Reconciliation overhead. Positions across custodians, funds, and bank accounts are assembled into a single view by hand, and that view is always slightly stale.
Every one of these costs originates in the same place: the record-keeping and settlement layer between the treasurer and the asset.
What a tokenized treasury is
A tokenized treasury is a share in a fund holding short-term government instruments, recorded as a token on a blockchain rather than solely on a transfer agent's internal ledger.
The underlying fund is unchanged: the same cash, T-bills, and repo; the same regulatory structure; the same named custodian, administrator, and auditor. What changes is the record: ownership becomes a live entry rather than a periodic statement, and transfer becomes something the holder can initiate directly, within whatever eligibility rules the issuer enforces.
That record is what governs how quickly cash can move, be pledged, or be redeployed.
Why the settlement layer decides whether this works
For a tokenized fund share to be operationally useful rather than merely novel, the network beneath it has to meet conditions that are unremarkable in traditional finance and were, until recently, hard onchain.
Settlement has to be fast enough to stop being a variable. If confirmation takes minutes, the treasurer is managing a settlement window again. Avalanche finalizes transactions in under a second, so network speed stops being a slowdown in the process.
Availability can't depend on a calendar. Obligations don't pause for weekends or holidays. A network that runs continuously lets positions move on the business's schedule, not the market's opening hours.
Compliance has to live in the asset. An institutional share class carries eligibility rules: who may hold it, in which jurisdictions, subject to what screening. Avalanche supports enforcing those controls at the infrastructure level, so an ineligible transfer fails at the point of transfer rather than surfacing downstream in reconciliation. Issuers that need a dedicated environment can run an Avalanche L1: a purpose-built network with its own validator set and parameters, still connected to the wider Avalanche ecosystem.
Existing tooling has to work. EVM compatibility means the custody platforms, audit firms, and contract libraries institutions already use apply directly, with no bespoke integration per counterparty.
Costs have to be predictable. Transfer costs that swing with unrelated network activity can't be modeled in advance, and anything a treasury budgets has to be modeled in advance.
Live in production: BlackRock's BUIDL
The clearest evidence that tokenized treasuries have cleared the pilot stage is the BlackRock USD Institutional Digital Liquidity Fund (BUIDL).
Launched in March 2024, BUIDL was BlackRock's first tokenized fund on a public blockchain. Securitize tokenizes it and acts as transfer agent; it holds cash, US Treasury bills, and repurchase agreements. Each token holds a stable $1.00 value, with dividends accrued daily and paid to holders' wallets rather than through a redemption cycle. BNY Mellon custodies cash and securities; subscriber custody runs through Anchorage Digital, BitGo, Copper, and Fireblocks.
Two points are worth drawing out for anyone evaluating the model. First, allocations of this size are directed by institutional subscribers choosing where the share class sits. Concentration on a particular network is their decision, not the issuer's. Second, BUIDL is no longer only a place to hold cash: it has been accepted as off-exchange trading collateral, and a wrapped form has been used in onchain lending markets. That is the immobile-collateral problem addressed directly: the position keeps accruing while doing work elsewhere, with no equivalent in the traditional structure.
What this means for a treasury team
Tokenized treasuries don't ask a treasury function to operate differently. The instrument is the same, the regulatory framework is the same, and the custodians are largely the same names. What’s different is that the cash position becomes continuously visible, transferable on demand within its eligibility rules, and usable as collateral without being sold first.
For issuers and asset managers, the shift is distribution: a tokenized share class can reach holders and platforms a traditional structure can't, without giving up the compliance controls that make the product acceptable to institutional buyers in the first place.
Both shifts rest on one thing: a settlement layer beneath that is fast enough, available enough, and controlled enough to disappear into the process. They ask nothing new of the operating model a treasury already runs.