Ondo US Dollar Yield (USDY)

What Ondo US Dollar Yield is

Ondo US Dollar Yield (USDY) is a tokenized secured note that pays the yield on short-term US Treasuries to its holders. Ondo Finance describes it as "the world's first freely transferable yield-bearing token secured by US Treasuries," accruing yield daily across multiple blockchains (source: Ondo Finance, September 2026). It is not a stablecoin and it is not available to US persons.

The distinction from a stablecoin is structural, not cosmetic. Stablecoin holders own an unsecured claim on an issuer and receive no interest. USDY holders have a security interest in the assets backing the token and receive nearly all the yield those assets generate.

How it works

USDY is a note issued by a bankruptcy-remote entity and secured by a portfolio of short-term US Treasuries and bank demand deposits. Ondo's documentation notes that, depending on when a particular tranche was issued, USDY "may be secured by either short-term US Treasuries, shares of iShares Short Treasury Bond ETF, or bank demand deposits."

The token comes in two forms. USDY is the accumulating version: yield shows up as a rising redemption price per token. rUSDY is the rebasing version: the price stays at one dollar and your balance grows instead. Ondo's example is direct. If you hold 100 of each and the USDY price rises from $1.00 to $1.01, both positions are worth $101, but you hold 100 USDY at $1.01 or 101 rUSDY at $1.00. Conversion between the two is available at any time. Rebasing runs automatically when the price updates each business day.

Minting and redemption are open around the clock. Onboarded holders mint USDY with USDC at any time, and Ondo notes that deposits of $100,000 or more can also be made by US dollar bank wire. Redemptions are available daily, including weekends and bank holidays. One constraint matters: to comply with US law, redemption proceeds can only be wired to non-US bank accounts.

Onboarding is required to mint or redeem, but not to hold. Like a stablecoin, USDY is a bearer asset that can be transferred to someone who has never dealt with the issuer. That is what "freely transferable" means here, and it is why USDY appears in defi applications rather than only in a closed subscription system.

As of September 2026, Ondo lists USDY on eleven networks: Ethereum, Mantle, Solana, Sui, Aptos, Noble, Arbitrum, Stellar, Sei, Tempo and BNB Chain (source: Ondo Finance).

Supply and tokenomics

Supply has no cap and no schedule. It grows when eligible investors subscribe and shrinks when they redeem, and it is always meant to be over-collateralized by the underlying portfolio.

Ondo publishes those figures, and they change continuously, so treat any specific number as a snapshot rather than a standing fact.

There is no governance token, no staking and no burn attached to USDY. Holders earn the underlying yield less the fees, obligations and expenses of the structure; that spread is how the issuer is paid.

History

USDY was launched by Ondo Finance as a product aimed at non-US investors who wanted Treasury yield in a form that could move on-chain. It was originally issued by Ondo USDY LLC. Ondo's documentation records that this entity "as of December 15, 2025 has been folded into the Ondo Stocks umbrella," and elsewhere names Ondo Global Markets (BVI) Limited as the issuer of USDY tokens. Anyone doing diligence should read the current offering documents rather than relying on a single entity name, since the structure has been reorganized.

The token expanded steadily across chains, reaching eleven networks by September 2026, and became one of the more widely integrated tokenized Treasury products in decentralized finance, used as collateral and as a yield-bearing settlement asset.

Risks and what to watch

Eligibility is the first thing to check. Ondo prohibits subscription, acquisition and redemption by persons in the United States, Canada, Belarus, Russia, Cuba, Iran, Libya, Myanmar, North Korea, Somalia, South Sudan, Sudan, Syria, Afghanistan and sanctioned regions of Ukraine, and by any US person as defined in Regulation S under the Securities Act of 1933. Other jurisdictions impose eligibility tests such as professional or accredited investor status. Buying USDY on a secondary market does not make an ineligible person eligible to redeem it.

Second, this is a credit and market instrument, not a dollar. Treasury bills can lose value, the collateralization ratio can fall, and the issuer's bankruptcy-remoteness is a legal construction that would have to survive a real bankruptcy to be worth anything.

Third, yield is variable. A 3.60% rate in September 2026 reflects short-term US rates at that time. If rates fall, the yield falls, and the token's appeal relative to a plain stablecoin narrows.

Fourth, multi-chain deployment adds surface area. Eleven networks means eleven sets of contracts and, for some of them, bridge infrastructure. Holding USDY on a smaller chain carries the risk of that chain and its bridges, not just Ondo's.

Finally, watch for the rebasing trap. Some custodians, exchanges and smart contracts do not handle rebasing tokens correctly. If you are integrating, know whether you hold USDY or rUSDY.

Frequently asked questions

Is USDY a stablecoin?

No. It is a tokenized secured note whose value rises as yield accrues, or whose balance grows in the rebasing version. Unlike a stablecoin holder, a USDY holder has a security interest in the assets backing the token.

Can US residents buy USDY?

No. US persons as defined under Regulation S are prohibited from subscribing for, acquiring or redeeming USDY, along with residents of Canada and several sanctioned jurisdictions (source: Ondo Finance documentation, September 2026).

What is the difference between USDY and rUSDY?

USDY accumulates yield in its price, which rises over time. rUSDY holds a price of one dollar and increases your token balance daily instead. You can convert between them freely.

What backs USDY?

Short-term US Treasuries and bank demand deposits, held by a bankruptcy-remote issuer, with a published collateralization ratio above 100%. Older tranches may be secured by a short-Treasury exchange-traded fund instead.

Where can I buy Ondo US Dollar Yield?

USDY is minted directly by eligible investors and also trades on some venues. See where to buy Ondo US Dollar Yield for what is listed in your jurisdiction and Exchanges for how those venues work.