FalconX, a crypto-focused prime brokerage, has launched support for trades collateralized with tokenized U.S. Treasury Bills (USTB), responding to increasing investor interest in government-backed digital assets.

According to a representative from FalconX speaking to The Block, the brokerage executed its first USTB-collateralized trade on June 11. USTB tokens represent short-term debt securities issued by the U.S. government and are tradable on public blockchains.

The decision to accept USTB tokens as collateral comes as U.S. Treasury Bills continue to offer attractive yields above 5%, following Federal Reserve rate hikes aimed at managing inflation. Investors seeking stability amidst crypto market volatility are turning to T-bill-backed digital assets, viewing them as a safer alternative to stablecoins which may experience price fluctuations if they deviate from their pegged assets.

FalconX's move to embrace USTB as collateral marks its latest foray into tokenized real-world assets. Earlier this year, the firm began accepting BUIDL, an Ethereum-native token backed by U.S. Treasury bills, for trades.

The broader adoption of on-chain versions of government bonds and other real-world assets is gaining momentum among investors. Data from digital asset firm 21.co indicates that the market value of tokenized government securities under management has nearly doubled over the past year, reaching approximately $1.54 billion currently.

FalconX's initiative underscores the growing intersection between traditional finance and blockchain technology, providing investors with innovative avenues to engage with familiar asset classes in a digital format. As demand for tokenized government securities continues to rise, FalconX positions itself at the forefront of facilitating secure and transparent trading solutions in the evolving digital economy.