Alexander Lorenzo explains how major institutions like BlackRock use tokenized government debt and stablecoins to amplify yields in ways retail investors can't access. By pooling funds into government bonds, creating USYC tokens, and redepositing them into DeFi systems, they effectively double their returns. Japan has already deployed this strategy.
There's going to be a lot of big money people that will take advantage of this right here. As you can see, this is BlackRock, Circle, all these big companies. This is RWA XYZ that essentially tokenize government debt. They put together a pool of money. Let's say they have $1 billion in this pool and in this pool of money, it's other people's investments and they take that pool of money and you guessed it, they put that into government debt generating a yield. You can put your money, your crypto that you just got when you put it in DeFi, you could put that into their fund. You'll get a yield. By buying government debt. It'll be extremely safe because it's from the government, like we just talked about. And essentially, they'll give you a token in return called USYC. That is called tokenized debt. When we pull this together, it gets a little crazy. Think about this. If I'm a country, which by the way, many countries— Japan, I think, is the 2nd biggest purchaser of US debt in the world— and if they make a bank with a stablecoin, they could double their yield. They could take that out, put it in a stablecoin. They own the stablecoin. Put that $100,000 in government debt, get the 8% yield or whatever the case is. Then take the tokenized version, put it right back into government debt. They could double their yield. It's called an unfair advantage.
