USYC (US Yield Coin) is an on-chain representation of the Hashnote Short Duration Yield Fund (SDYF), issued by Circle International Bermuda Limited. The fund invests in short-term U.S. Treasury Bills and reverse repurchase agreements backed by U.S. government securities. Its primary strategy is to deploy assets in reverse repos to maximize liquidity and minimize duration risk. Following Circle's acquisition of Hashnote in 2025, USYC provides investors with short-term risk-free rate returns while leveraging blockchain technology for transaction speed, transparency, and composability. ^{[5] [6] [1]}

Overview

USYC (US Yield Coin) is the tokenized representation of the Hashnote International Short Duration Yield Fund Ltd. (SDYF), which is managed by an in-house Fixed Income team and invests primarily in short-term U.S. Treasury Bills and reverse repurchase agreements (reverse repos) backed by U.S. government securities. The fund earns yield based on the short-term Fed rate. The token provides returns based on short-term risk-free rates while leveraging blockchain for transaction efficiency and transparency. ^{[7] [1]} Investors can mint or redeem USYC 24/7/365 with real-time (T+0) settlement in USDC through an automated smart contract system for self-service transactions.

The token's issuer, Circle International Bermuda Limited, is regulated by the Bermuda Monetary Authority (BMA), while the underlying mutual fund is licensed by the Cayman Islands Monetary Authority (CIMA). USYC is only available to eligible non-U.S. Persons. The platform maintains transparency through regular asset and token price disclosures via an Oracle feed, with all service, redemption, and management fees disclosed upfront. Security is ensured through segregated custodial accounts with a prime broker, external audits, and an externally-audited ERC-20 token contract. ^{[1] [7]}​

Acquisition by Circle

Acquisition by Circle

In January 2025, Circle, the issuer of USDC, announced its acquisition of Hashnote, the original issuer of USYC. At the time of the acquisition, RWA.xyz identified USYC as the world's largest tokenized money market fund, with 44 million to a peak of $1.6 billion. ^{[6] [8]}​

The acquisition was part of a broader strategy for Circle to enter the real-world asset (RWA) market and fully integrate USYC with USDC to enable seamless conversion. The goal was to establish USYC as a preferred form of yield-bearing collateral in digital asset markets. Alongside the acquisition, Circle announced a strategic partnership with the global trading firm DRW, via its crypto-asset subsidiary Cumberland, to expand institutional liquidity and settlement services for both USDC and USYC. Circle also announced plans to deploy native USDC on the Canton Network, a public blockchain where USYC was already supported, to facilitate 24/7 on-chain convertibility between the two assets. ^[6]​

Tokenomics

USYC is a permissioned ERC-20 token designed to accrue value based on the yield generated by the underlying Short Duration Yield Fund (SDYF). The fund's investments in short-term U.S. Treasury Bills and repo/reverse-repo agreements generate returns based on the short-term Fed rate. ^[1]

The token's price reflects the net asset value (NAV) of the fund's shares and is published regularly through an Oracle feed. As the fund earns yield, the value of each share—and therefore each USYC token—is intended to increase over time. Investors mint USYC by depositing USDC and redeem USYC for USDC on a T+0 basis, with transactions processed 24/7/365. It is important to note that like other fixed-income assets, the underlying Treasury Bills can fluctuate in value. All associated service, redemption, and management fees are disclosed to investors upfront. ^[1]

Structure

Investor Onboarding

Investors can obtain USYC by onboarding to the fund. USYC is available only to non-U.S. Persons (as defined in Regulation S under the Securities Act of 1933) who onboard through the Hashnote Short Duration Yield Fund (SDYF), a Cayman Islands Monetary Authority (CIMA)-regulated mutual fund. USYC tokens represent fund shares, requiring all holders to complete KYC/AML verification. The fund administrator updates the SDYF share registry to reflect USYC token transactions. ^{[3] [4] [7]}

Subscription Workflow

Investors who complete onboarding to the fund have their wallet addresses added to an allowlist, granting permission to hold USYC. They can subscribe by transferring stablecoins (USDC) through the Smart Contract Teller, after which the fund allocates the capital to its Prime Brokerage for investment in T-Bills and repo/reverse-repo agreements. While these are considered low-risk assets, fixed-income instruments can lose value. Ownership is recorded on-chain via a permissioned ERC-20 smart contract, with USYC tokens minted to the investor’s wallet in proportion to their fund shares. The number of USYC tokens received corresponds to the deposit amount divided by the current USYC price. ^{[2] [7] [1]}

Redemption Workflow

Approved wallets on the allowlist can redeem USYC by burning the tokens through the Smart Contract Teller in exchange for USDC. The fund administrator updates the registry to reflect the burned tokens, and Circle transfers stablecoins to the client. ^{[2] [7]}

Entitlements

USYC transactions are controlled through an entitlements system that assigns roles to wallets of verified entities, determining their ability to hold and transfer the token. Smart contracts verify these permissions before processing transactions and also conduct OFAC sanctions checks using an on-chain oracle maintained by Chainalysis. The entitlements contract can halt all transactions if suspicious activity is detected, preventing further transfers until the issue is resolved. ^[2]

Smart Contract Teller

The Smart Contract Teller enables on-chain transactions for subscribing to and redeeming USYC. Investors can mint USYC using USDC. Subscriptions and redemptions are available 24/7/365, settle in real-time (T+0), and are based on the latest reported price. Liquidity is managed through frequent asset rebalancing. ^{[2] [7]}