With the continuous reduction of CMOS device dimension, the importance of Random Telegraph Noise (RTN) keeps growing. To determine its impact on circuit performance and optimize the design, it is essential to physically model RTN effect and embed it into the standard simulation environment. In this paper, a new simulation method of time domain RTN effect is proposed to benchmark important digital circuits: (1) A two-stage L-shaped circuit is proposed to generate RTN signal by integrating a white noise source. An L-shaped circuit is a RC filter connected with an ideal comparator, where RC values are calibrated with the physical property of RTN; (2) This sub-circuit is fully compatible with SPICE, enabling the time domain analysis in nanometer scale digital design; (3) The importance of discrete RTN is demonstrated on a 32nm SRAM design and a 22nm low power ring oscillator (RO), using the proposed method. As compared to traditional 1/f noise, the impact of RTN is more significant under low voltages, leading to tremendous differences in the prediction of Vccmin and failure probability in SRAM, as well as jitter noise in RO.