Circle USYC (USYC)

What Circle USYC is

Circle USYC (USYC) is a permissioned token that represents shares in a regulated money-market-style fund. It is "the onchain representation of Hashnote International Short Duration Yield Fund Ltd. (SDYF)," a fund that holds short-term US Treasury bills and runs repo and reverse-repo trades (source: USYC documentation, September 2026). It is not a stablecoin and is not open to the public: only onboarded, non-US institutions can hold it.

That restriction is the single most important fact about USYC. The token contract checks an on-chain allowlist before it will let anyone receive or transfer a balance. If your wallet has not been through the fund's onboarding, the transfer simply fails. USYC therefore behaves less like a freely traded altcoin and more like a fund share that happens to settle on a blockchain.

How it works

The structure has two layers. In traditional finance, an investor owns shares in SDYF, a Cayman Islands mutual fund licensed by the Cayman Islands Monetary Authority. On-chain, that shareholding is mirrored by a permissioned ERC-20 smart contract. USYC is issued by Circle International Bermuda Limited, regulated by the Bermuda Monetary Authority (source: USYC documentation, September 2026). The fund administrator moves shares in the SDYF register to match movements of the token.

Subscription works through a contract the documentation calls the Teller. An onboarded investor sends USDC to the Teller, the fund deploys the money into Treasury bills and repo through its prime broker, and USYC is minted to the investor's wallet in an amount equal to the deposit divided by the current token price. Redemption reverses this, burning USYC and returning USDC. Both directions are available 24 hours a day, every day of the year, with same-day settlement.

Price is not fixed at a dollar. USYC accrues yield through an increasing price per token, calculated as the net asset value of the prime brokerage account divided by the total supply on issue. The price is reported once per business day to a Chainlink-compatible oracle, typically at 9 a.m. Eastern, after the prior day's activity has been reconciled. Trading days run Monday to Friday excluding US federal holidays, so a Friday repo accrues three days of interest.

Subscriptions use an "effective subscription price" rather than the last reported price. Between the daily price report and 2 p.m. Eastern, subscriptions and redemptions happen at the same price. After 2 p.m., subscriptions price off a forecast of the next report, which reflects whether the money can earn yield that business day.

Access is gated by an entitlements contract. Wallets belonging to entities that have passed kyc and aml checks receive a role that permits them to hold and transfer the token, and every transfer queries that contract first.

Supply and tokenomics

USYC has no supply cap and no issuance schedule. Supply is whatever investors have subscribed for, minus what they have redeemed. There is no burn tied to activity, no staking, and no governance token. The token's value comes entirely from the assets in the fund.

Fees are published, and tiered pricing is available for private liquidity arrangements. Onboarding sets a floor on participation, and information about USYC is directed only to entities that are not US persons under Regulation S of the Securities Act of 1933.

History

USYC began as Hashnote's US Yield Coin, a tokenized fund product aimed at crypto-native institutions that wanted Treasury-bill yield without leaving on-chain settlement. Circle later acquired Hashnote and took over issuance, and the product now carries Circle branding while the underlying fund keeps the Hashnote name. As of September 2026, the documentation names Circle International Bermuda Limited as issuer and routes support through Circle.

The published service-provider list gives a sense of the plumbing: Marex as prime broker, Customers Bank as bank, Cohen and Company as auditor, NAV Consulting as fund administrator and one of two KYC providers, and Fireblocks for multi-party-computation wallet infrastructure (source: USYC documentation, September 2026).

Risks and what to watch

The obvious constraint is eligibility. If you are a US person or an individual rather than an institution, you cannot subscribe or redeem, and the allowlist will not let you receive the token by transfer either. Anyone encountering USYC through a secondary venue should assume the permission checks still apply.

Beyond that, USYC carries ordinary fund risk. The documentation is explicit that "fixed income assets such as Treasury Bills may lose value." Reverse repo is designed to minimize duration and credit risk, not to eliminate them, and the fund depends on its prime broker and bank performing. Assets sit in segregated custodial accounts, which is a meaningful protection, but it is a legal arrangement rather than a cryptographic one.

There is also intermediation risk in the daily price. USYC's on-chain price is only as good as the reported net asset value that feeds the oracle. A delay in reporting, or a dispute over valuation, would propagate to anything using USYC as collateral. Protocols that accept USYC inherit that dependency.

Finally, watch the regulatory perimeter. USYC sits across a Bermuda-regulated issuer, a Cayman-licensed fund, and a Regulation S offering restriction. Any of those can change, and tokenized fund products in general are attracting fresh rulemaking. Check the issuer's own disclosures rather than relying on a summary.

Frequently asked questions

Is Circle USYC a stablecoin?

No. Its price rises as the fund earns yield rather than tracking one dollar. A stablecoin is a liability designed to hold a fixed value; USYC is a share in a fund whose value moves.

Who can hold USYC?

Institutions outside the United States that have been onboarded to the underlying fund, passed KYC and AML checks, and had their wallet address added to the allowlist. The minimum investment is one hundred thousand US dollars (source: USYC documentation, September 2026).

What backs USYC?

Short-term US Treasury bills plus repo and reverse-repo positions, held through the fund's prime broker in segregated custodial accounts. The fund is described as deploying assets primarily in reverse repo to keep liquidity high and duration low.

How does the yield reach holders?

Through the token price, which is recalculated and reported once each business day. Holders do not receive extra tokens; each token becomes worth more.

Where can I buy Circle USYC?

USYC is subscribed and redeemed directly with the issuer rather than bought on a typical retail venue, and access is restricted. See where to buy Circle USYC for whatever venues do list it in your jurisdiction, and Exchanges for how those venues work.