How To Invest in Tokenized U.S. Treasury as Non-U.S. Retail Investors

The buzz around real-world assets (RWAs) is heating up, with the spotlight on the renowned US Treasury Bills, known for their low-risk and attractive yield. Excitingly, global investment in these assets is now accessible for individual investors worldwide with its tokenization!

In this blog post, we’ll unravel the burgeoning demand for tokenized US Treasury Bills beyond American shores, the limited access to tokenized Treasury for non-US retail investors, and the platforms that support this minority to purchase tokenized Treasury.

Fueling the global craze for tokenized US Treasury Bills

US Treasury Bills (also known as Treasury Bills and T-Bills) are short-term debt securities issued by the US Treasury Department. The global appetite for T-Bills mainly rely on how safe it is and the stable and relatively good yield it’s been generating. They are considered to be one of the safest RWA investments as it’s backed by the full faith and credit of the US Government. Just this year, due to the macroeconomic forces, the three-month Treasury yield has surged to over 5%, from virtually 0% at the end of 2021. The combination of a low-risk profile and competitive returns (compared to other low-risk investment options) becomes particularly enticing for investors from non-US countries where inflation is high. This include Indonesia, Nigeria, United Kingdom, India, Japan, and many others.

The investment into T-Bills are now more accessible to individual investors outside of the US with its tokenization.

Tokenized US Treasury: limited access for individual investors

The majority of platforms offering the purchase of tokenized T-Bills require individual investors to be either US citizens or Individual Accredited Investors (IAI). Platforms like Arca Labs, WisdomTree Prime, and Franklin Templeton Benji Investments only provide tokenized US Treasury to US citizens or permanent US residents. If you’re eyeing platforms like Matrixdock, Ondo Finance, OpenEden, Backed Finance, and Yieldteq, they will ask for proof that you’re an Accredited Investor or a Professional Investor through their income and net worth tests. Citizenship and accreditation proof requirements can be a major roadblock for a lot of global individual investors to diversify their portfolio.

Image 1: The requirements for individual investors by Yieldteq (source)

Platforms that offer tokenized US Treasury for individual non-accredited investors (INI)

We’ve found a limited number of platforms that offers tokenized US Treasury to non-US retail investors: Swarm and Centrifuge.

1. Swarm

Swarm is an exchange for securities and crypto that brings digitization and novel trading solutions to the world of traditional finance (TradFi). Currently supporting Polygon and Ethereum wallet owners, Swarm offers individual investors easy access to purchasing T-Bills.

Users need to go through a KYC process, or set up their ‘Passport.’ After connecting wallet and signing in the wallet, users need to connect their identity (ID), or confirm they’re not a US citizen or from a non-serviced country (list of Swarm’s service countries here). Then they’ll need to verify their ID with:

• Email verification, 
• Identity document (scanning of non-expired Passport, ID card, or Residence permit),
• Proof of residence (scanning of document with full name and address from 3 months back), and
• A selfie (liveness check). 

The process for checking submission is quite fast, users will know up to 1 minute if they need to resubmit any document.

2. Centrifuge

Centrifuge is an on-chain credit platform that partners with TradFi institutions to create asset-backed securities (ABSs) that are backed by RWAs. They offer tokenized RWAs on Ethereum and Centrifuge chain, but their T-Bills (AnemoyLiquid Treasury Fund 1) are exclusively on Centrifuge. Users must switch networks from their wallets, like MetaMask, Coinbase Wallet, or Centrifuge-native options like Subwallet. 

All individual investors, accredited or not, have to go through the same ID verification process. They’ll have to provide:

• A valid email address, 
• A passport or government-issued photo ID,
• Proof of address (e.g., utility bill, phone bil,l or council tax bill, not older than 3 months), and
• A completed tax information form W-8BEN.

After the final step of signing the subscription agreement, the investor will receive an email notification once the issuer has countersigned and approved their application. 

Due to US sanctions, Centrifuge currently can’t serve individuals residing in or citizens of their listed countries.

Tokenized US Treasury: A new way to diversify portfolio for global investors

The tokenized US Treasury Bills open up a world of low-risk, high-yield opportunities for non-US retail investors. As the buzz around real-world assets grows, the accessibility of these tokenized treasures becomes a game-changer. 

Check out tokenized asset data on Birdeye: https://birdeye.so/insights/rwas 

Disclaimer 

Birdeye only serves as a supporting tool to help users make informed trading decisions, not giving them financial advice! Please always conduct your own research and take responsibility for all of your investment decisions.