Circle USYC usyc
What is Circle USYC?
USYC (US Yield Coin) is a permissioned, yield-bearing token that represents an interest in Hashnote International Short Duration Yield Fund Ltd. (SDYF), a Cayman Islands mutual fund. The fund invests primarily in short-term U.S. Treasury bills and reverse-repurchase agreements backed by U.S. government securities. USYC is therefore best understood as a tokenized money-market-fund share or yield-bearing stablecoin-like asset—not a fiat-backed stablecoin promising a fixed one-dollar redemption. Its value accrues through the fund's net asset value and rising token price as underlying assets earn short-term rates. USYC is issued by Circle International Bermuda Limited, regulated by the Bermuda Monetary Authority, and represents an interest in a fund licensed by the Cayman Islands Monetary Authority. It is intended for eligible non-U.S. institutional investors and is used as onchain cash management, yield-bearing collateral, and margin collateral in always-on digital-asset markets.
What problem does Circle USYC solve?
Traditional money-market funds can provide exposure to short-duration government assets, but subscriptions, redemptions, settlement, banking hours, and collateral movement generally depend on offchain processes and traditional market windows. Crypto and other 24/7 markets need a cash-like asset that can remain productive while moving quickly between wallets, exchanges, custodians, prime brokers, and smart contracts. USYC addresses this by putting a regulated fund interest onchain, allowing eligible investors to subscribe and redeem in USDC through smart-contract workflows and use the token as programmable collateral. The trade-off is that it remains a regulated investment product with eligibility restrictions, KYC/AML and wallet allowlists, fund, custody, liquidity, oracle, smart-contract, regulatory, and underlying-Treasury risks; it is not the same as a bank deposit or an unrestricted dollar token.
How does Circle USYC work?
An eligible institution first onboards to SDYF, passes KYC/AML and wallet screening, and receives permission to hold USYC. Through the Smart Contract Teller, the investor supplies USDC; the administrator records the corresponding fund shares and the system mints an equivalent amount of permissioned ERC-20 USYC. The amount minted equals the USDC deposit divided by the current USYC price. Fund assets are invested primarily in reverse repos and short-term U.S. government securities. Interest earned by those assets is reflected in the fund NAV/token price, so holders do not stake or claim periodic token rewards. A token-price and holdings Oracle provides onchain reporting. To exit, an allowlisted holder burns USYC through the Teller and receives USDC; official documentation describes 24/7/365 access and atomic T+0 settlement, while Circle notes that settlement speed depends on instant-redemption capacity (below capacity, one block; above capacity, T+0 or T+1). Entitlements contracts check permissions and sanctions status on transfers and can halt transactions. USYC is deployed across supported networks including Ethereum, BNB/BSC, Solana and other listed networks, with native and cross-chain Teller arrangements depending on chain.
Key facts
- Identity: USYC (US Yield Coin), tokenized representation of Hashnote International Short Duration Yield Fund Ltd. (SDYF)
- Underlying assets: Primarily short-term U.S. Treasury bills and reverse-repurchase agreements backed by U.S. government securities; the fund targets overnight federal-funds-rate returns
- Issuer and regulation: Issued by Circle International Bermuda Limited, regulated by the Bermuda Monetary Authority; represents an interest in a Cayman Islands mutual fund licensed by CIMA
- Access: Institutions outside the United States only, subject to Regulation S and additional eligibility restrictions; minimum investment is US$100,000
- Settlement: Subscriptions and redemptions use USDC; official docs advertise 24/7/365 availability and atomic onchain settlement, but actual redemption timing is bounded by available instant liquidity
- Yield model: Yield accrues automatically through a rising token price/NAV; no staking, claiming, or rebasing reward is required
- Token and controls: Permissioned ERC-20 representation with allowlisted, KYC/AML-screened wallets; Entitlements checks roles and OFAC sanctions data, and transfers can be frozen
- Transparency: Token price and fund holdings are published through an onchain Oracle; token contracts are audited and verified on Etherscan
- Fees and economics: Circle's USYC page lists subscription and redemption fees, a performance fee on yield, and a fee-waiver tier for eligible investors; rates and fee terms can change
- History: Circle announced its acquisition of Hashnote and USYC on January 21, 2025, describing USYC as tokenized money-market collateral and planning tighter USYC-USDC integration
- Networks: Official contract documentation lists Ethereum, BSC, and Solana mainnet deployments and additional supported network integrations; addresses are network-specific
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Frequently asked questions
Is USYC a stablecoin?
USYC is stablecoin-like in that it is subscribed and redeemed using USDC and is designed for cash/collateral workflows, but it is not a conventional fiat-backed stablecoin with a fixed one-dollar promise. It represents shares in a money-market fund, and its token price changes as the fund earns yield.
What backs USYC?
The underlying SDYF invests primarily in short-term U.S. Treasury bills and reverse-repurchase agreements backed by U.S. government securities. USYC is a tokenized fund interest, so the relevant backing is the fund portfolio and its NAV—not a segregated bank-dollar claim held at exactly $1.
How does USYC earn yield?
The fund earns returns from short-term Treasury and reverse-repo positions, targeting short-term/overnight federal-funds-rate returns. The yield is reflected in a rising USYC token price/NAV rather than paid as a separate staking reward or rebasing balance.
Who can buy USYC?
Official onboarding materials state that USYC is accessible only to institutions outside the United States, subject to eligibility restrictions, Regulation S requirements, KYC/AML checks, wallet screening, and a US$100,000 minimum investment. It is not generally available to U.S. persons.
How do I subscribe or redeem USYC?
An onboarded, allowlisted wallet uses the USYC Smart Contract Teller and USDC. USDC is deposited to mint USYC, and USYC is burned to receive USDC. Documentation describes 24/7/365 access; settlement is atomic/T+0 in the standard workflow, while the Circle product page explains that timing can vary with instant-redemption capacity and may be T+0 or T+1 above that capacity.
Can USYC transactions be frozen?
Yes. The permissioned token checks wallet entitlements and sanctions status. Hashnote documentation says the Entitlements contract can halt all USYC transactions, and suspicious activity can cause the allowlist to revert transfers until the issue is resolved.
Where can USYC be used?
USYC is designed for onchain cash management, yield-bearing margin and cross-margin collateral, trading venues, lending desks, custodians, and prime-broker workflows where supported. Integrations and availability depend on the network, venue, jurisdiction, and the user's eligibility.
Is USYC risk-free because it holds Treasuries?
No. Short-duration government securities and repo can reduce credit and duration risk but do not eliminate it. Users also face fund/NAV, counterparty and custody, liquidity capacity, oracle, permissioning, smart-contract, operational, regulatory, sanctions, and blockchain-network risks.
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