Bitcoin (BTC) bulls are paying close attention to the weekly closing… Conflicting moves include tokenization of UK government bonds, suspension of institutional lending, and BlackRock's entry into DeFi. With Bitcoin (BTC) prices entering a correction phase again, some analysts say this week's closing could be a watershed moment for determining its future direction. Meanwhile, the UK government has launched a pilot project to tokenize government bonds on a blockchain, and BlockFills, an institutional cryptocurrency lending company, has suspended deposits and withdrawals amid a market plunge. BlackRock, the world's largest asset manager, has taken its first step into DeFi by bringing US Treasury tokens to Uniswap (UNI).
The UK partners with HSBC to pilot government bond tokenization.
The UK Treasury has selected HSBC's tokenization platform, HSBC Orion, as its partner for a pilot project to issue digital government bonds. HSBC will be responsible for the core infrastructure of the "Digital Gilt Instrument (DIGIT)" project, which will issue and distribute government bonds (gilts) based on blockchain. The UK Treasury unveiled the DIGIT pilot plan in July 2025, laying out a blueprint to apply blockchain technology to government bond issuance and foster a domestic tokenization infrastructure. This announcement marks the next step in concretizing this roadmap. Lucy Rigby, the UK Treasury's Economic Secretary, stated, "We want to make the UK an 'investment-friendly and business-friendly place,'" and added, "This DIGIT pilot is an opportunity to experiment with how distributed ledger technology (DLT) can be used to increase efficiency and reduce corporate costs." The DIGIT pilot aims to issue and operate short-term government bonds in a digitally native format within the Digital Securities Sandbox (DSS). While utilizing a sandbox structure to test on-chain payments, secondary market liquidity, and expanded investor access, it operates separately from the UK government's existing government bond management program. Given the UK government's push to tokenize public sector issues and the global bank HSBC's leadership, some speculate that tokenization experiments could spread across the European government bond market in the future.Institutional lender Blockfils halts withdrawals amid Bitcoin plunge
Blockphils, a cryptocurrency liquidity and lending platform targeting institutional investors, announced that it had suspended all customer deposits and withdrawals last week. The move was explained as a measure to protect liquidity amid the plunge in Bitcoin and the overall cryptocurrency market. Blockphils announced on Wednesday via X (formerly Twitter) that it had temporarily suspended customer deposits and withdrawals, stating, “Considering the recent market and financial environment, we have temporarily suspended customer deposits and withdrawals. The goal is to protect our customers and restore platform liquidity.” The suspension remains in place. During last week’s market crash, Bitcoin fell further from around $78,995 (approximately KRW 1.138 billion) to around $60,000 (approximately KRW 864.66 million), a decline of approximately 24%. Amidst a series of leverage liquidations and margin calls, risks related to borrowing and collateral structures have also been highlighted for institutional-focused lending and liquidity platforms. Blockphils stated, "Management is working closely with investors and customers to quickly resolve the issue and restore liquidity." They added, "Deposits and withdrawals are blocked, but some trading activities, such as spot and derivatives trading, remain possible." However, they added that the restrictions are limited to "selected circumstances," indicating that internal priorities are prioritizing position management and collateral management. The potential impact of this measure is estimated at approximately 2,000 institutional clients, including large players such as asset managers and hedge funds. The transaction volume processed through the Blockphils platform in 2025 is estimated to exceed $60 billion (approximately KRW 86.466 trillion). Blockphils has previously only offered its services to investors with at least $10 million (approximately KRW 144.1 billion) in assets. This has raised concerns that leverage and off-chain credit risk may be significant. Whether this suspension of withdrawals is a one-time liquidity shortage or leads to structural insolvency will determine whether institutional investor confidence is restored.BlackRock officially enters DeFi by listing tokenized US Treasury bonds on Uniswap.
BlackRock, the world's largest asset management company, has officially entered the decentralized finance (DeFi) market by listing its tokenized US Treasury fund, the USD Institutional Digital Liquidity Fund (BUIDL), on the DeFi protocol Uniswap. This is a significant step forward for BlackRock, a leading figure in traditional finance (TradFi), as it marks its first direct engagement with DeFi. According to Wednesday's announcement, the BUIDL token will be listed on the Uniswap decentralized exchange, allowing qualified institutional investors to buy and sell on-chain. BUIDL is a tokenized money market (short-term bond) product backed by US Treasuries and other collateral, and is considered a prime example of BlackRock's experiment in providing on-chain liquidity. Concurrently, BlackRock has also agreed to purchase a certain amount of the Uniswap governance token, UNI. While the exact amount was not disclosed, this is interpreted as an intention to have a direct voice in the operation of the DeFi protocol through governance participation. Immediately after the announcement, the Uniswap token price soared to $4.2993 (approximately 6,190 won), and according to CoinMarketCap, the 24-hour trading volume surged 461%, reaching $879.4 million (approximately 12.67 trillion won). This unprecedented surge in trading volume, even among DeFi tokens, suggests that UNI reflects the anticipated influx of traditional financial capital. This collaboration was brokered by tokenization specialist Securitize. Securitize previously partnered with BlackRock to design an on-chain securities structure for the launch of BUIDL, and plans to initially limit trading to qualified institutional investors and market makers who meet regulatory requirements before gradually expanding participation. The market sees BlackRock's connection between BUIDL and Uniswap as the first step in building an "institutional DeFi gateway." This is because tokenized U.S. Treasuries, when traded on-chain, can be linked to stablecoins, DeFi lending, and automated asset management strategies, creating new revenue streams.Amid Bitcoin volatility, tokenization, DeFi, and lending risks are simultaneously highlighted.
This week, along with Bitcoin's price correction, demonstrated the extent to which the links between traditional finance and the cryptocurrency market are expanding, as well as where risks can arise. The UK government, in collaboration with HSBC, is accelerating the "public sector blockchain utilization" by testing the tokenization of government bonds. BlackRock is pioneering a new market called "institutional DeFi" by bringing BUIDL to Uniswap. Meanwhile, Blockphils, unable to withstand liquidity pressures amidst the market's sharp decline, took the drastic measure of suspending withdrawals. As Bitcoin, DeFi, and tokenization markets rapidly connect with the institutional landscape, the potential for individual platform risks to spill over into traditional finance, and vice versa, to on-chain assets, is growing. Market sentiment and the intensity of leverage restructuring are expected to vary depending on the weekly Bitcoin closing price this week. However, the gradual migration of core traditional finance sectors, such as government bonds, US Treasury funds, and institutional lending, onto blockchain is considered a significant trend that will shape the cryptocurrency market landscape in the medium to long term.💡 "From government bonds to DeFi... Only investors who understand the 'structure' will survive."
Even amidst Bitcoin's correction, massive capital is already moving on-chain, as seen with the tokenization of UK government bonds and BlackRock's foray into DeFi. At the same time, instances of institutional lending platforms like Blockfils blocking withdrawals demonstrate once again that risk structure should be considered before profitability.
Investors now need to understand not just price, but ① tokenization structure, ② DeFi mechanism, and ③ leverage and lending risks . In this environment, TokenPost Academy's 7-step masterclass provides a "practical curriculum" for survival and growth.
Step 2: The Analyst – Analyzes the true value of tokenized government bonds, money market funds, and DeFi tokens in numbers.
- Analyzing Tokenomics: By analyzing issuance structures, lockups, and inflation, we examine the dumping and dilution risks of tokenized assets like BUIDL and DIGIT and DeFi tokens.
- On-chain analysis: Leveraging transaction volume, liquidity, and user activity data, we verify whether institutional capital inflows from institutions like BlackRock and HSBC translate into real-world fundamentals .
Step 5: The DeFi User – We will revisit the basics of providing liquidity and earning interest on protocols like Uniswap.
- Understanding the DeX/AMM Structure: When BlackRock BUIDL is listed on Uniswap, we explain the principles of how price formation, fees, and slippage work.
- Liquidity Provisioning and Yield Farming: Designing a revenue structure that combines tokenized US Treasury bonds, stablecoins, and DeFi tokens, while quantifying impermanent loss and liquidation risks.
- Lending & Borrowing·LTV Management: Establish standards for how liquidity crunch and margin calls can occur in a market crash like the Blockpils incident, and how much LTV your portfolio can tolerate.
Step 6: The Professional (Futures/Options) – As Bitcoin volatility increases, it becomes difficult to survive solely through buying and selling.
- Futures and Options Fundamentals: Understand the structural aspects of hedging and short positions to reduce risk even in a bear market.
- Leverage and Margin Management: This course covers excessive leverage and liquidation mechanisms, common pitfalls for both institutions and individuals, with real-world examples.
Step 7: The Macro Master (Macro/Cycle) – Provides a "macro frame" that displays Bitcoin's weekly closing price, global interest rates, and government bond tokenization on a single screen.
- Connecting Liquidity, Interest Rates, and Crypto: We review examples of how government bond and money market tokenization , such as the UK's DIGIT and BlackRock's BUIDL, are intertwined with the Bitcoin cycle.
- Cycle Analysis and Portfolio Updates: Provides practical guidance on when to increase cash and when to increase on-chain asset allocation in volatile markets.
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🔎 Market Interpretation
The UK government is piloting the issuance of a digital government bond (DIGIT) using HSBC's tokenization platform, Orion, marking the full-scale introduction of blockchain-based tokenization into the sovereign bond market. This can be seen as a strategy to improve the efficiency of government bond issuance, distribution, and settlement, and establish the UK as a leader in tokenization within the G7.
Meanwhile, the fact that institutional lending platform BlockFills suspended deposits and withdrawals amid Bitcoin's 24% plunge demonstrates the significant liquidity and trust risks that remain during periods of increased volatility. As the platform primarily targets large institutional clients, market concerns also exist regarding the scale of the damage and the potential knock-on effects.
At the same time, BlackRock's listing of its tokenized US Treasury fund (BUIDL) on Uniswap and its purchase of UNI tokens signal that the connection between traditional finance (TF) and decentralized finance (DeFi) has moved beyond the "experimental" phase and into actual operations and trading. This raises expectations that institutional liquidity will gradually flow into DeFi protocols in the future.
💡 Strategy Points
1) Macro and Bond Investors: Digital gilts like DIGIT have the potential to evolve into a differentiated product line compared to physical government bonds in terms of liquidity, settlement speed, and fee structure. It's worth keeping an eye on whether an "on-chain premium/discount" develops in the UK government bond market.
2) Institutions and High-Net Worth Individuals: The BlockFills case reaffirms the risk of relying on a single platform and the importance of repayment and collateral structures. It's time to review distributed trading and lending channels, on-chain evidence-based collateral management, and real-time risk monitoring systems.
3) DeFi/Tokenization Investors: The BlackRock–Uniswap–Securitize line could be a prime example of a combination of regulatory-friendly tokenized assets and public DeFi. It is beneficial to observe the growth of BUIDLs and similar tokenized bond/money market assets, as well as their impact on the long-term demand for infrastructure tokens like UNI.
4) Regulatory and Infrastructure Perspective: If countries experiment with tokenization infrastructure through regulatory sandboxes, such as the UK's Digital Securities Sandbox (DSS), expand, the on-chain transfer of traditional assets like government bonds, corporate bonds, and real estate could accelerate. Consequently, demand for KYC/AML, on-chain identity, and institutional wallet solutions is also likely to increase.
📘 Glossary
• Gilt: A general term for government bonds issued by the British government, classified as bonds with high credit ratings and relatively safe.
• Tokenization: This is the process of issuing existing assets such as bonds, stocks, real estate, and cash in the form of digital tokens on the blockchain, and processing ownership, transactions, and settlement on the chain.
• DIGIT (Digital Gilt Instrument): A digital government bond pilot project promoted by the UK Treasury, it refers to a short-term government bond project issued and distributed based on blockchain.
• DSS (Digital Securities Sandbox): This is a sandbox system designed to allow new services and infrastructure related to digital securities to be tested under regulatory exemptions within the UK.
• BlockFills: A cryptocurrency platform that provides liquidity and lending services to institutions and high-net-worth individuals holding at least $10 million in cryptocurrency.
• Tokenized US Treasury Bond Fund (BUIDL): A tokenized US Treasury bond-based fund managed by BlackRock, where fund shares are traded as tokens (digital securities) on a blockchain.
• DeFi (Decentralized Finance): This refers to a blockchain-based open financial ecosystem that provides financial services such as lending, trading, and asset management using smart contracts without a central authority.
• Uniswap: A representative decentralized exchange (DEX) based on Ethereum that supports token exchange through an automated market maker (AMM) method.
• UNI Token: The governance token of the Uniswap protocol, providing voting rights on key decisions such as protocol upgrades and fee structures.
💡 Frequently Asked Questions (FAQ)
Q.
What's the difference between the UK's DIGIT digital government bond and BlackRock's BUIDL token?
While both examples share the similarity of placing traditional assets on blockchains, their issuers and purposes differ. DIGIT is a public project experimenting with digitalizing short-term government bonds (gilts) issued by the UK government, while BUIDL is a private asset management product managed by BlackRock, a tokenized fund based on US Treasury bonds. DIGIT focuses primarily on bond market infrastructure innovation and regulatory experimentation, while BUIDL focuses on on-chain trading and liquidity enhancement for institutional investors.
Q.
If something like BlockFills withdrawals are suspended, will it affect individual investors?
Because BlockFills targets only institutions and high-net-worth individuals with at least $10 million in cryptocurrency, direct customer losses primarily fall on institutional investors. However, if these institutions rapidly liquidate their holdings or adjust hedge positions on other exchanges or markets, liquidity reduction and increased selling pressure could increase overall market volatility, indirectly impacting individual investors.
Q.
What does BlackRock's Uniswap entry mean for DeFi investors?
BlackRock, the world's largest asset manager, has listed its tokenized U.S. Treasury fund (BUIDL) on Uniswap, signaling the beginning of direct trading of institutional assets on public DeFi infrastructure. In the short term, this could lead to increased demand and trading volume for UNI tokens, as well as the emergence of institutional-only pools. In the medium to long term, this could lead to increased growth in DeFi, with regulatory-compliant KYC and whitelist-based offerings, and on-chain money markets leveraging tokenized Treasury bonds and cash assets. However, given the limited initial participation of institutional investors, it's important to be cautious and monitor the gradual growth of this platform without overestimating the potential liquidity and profit opportunities.
TP AI Precautions
This article was summarized using a TokenPost.ai-based language model. Key points in the text may be omitted or inaccurate.
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