Circle has turned its tokenized Treasury fund into more than just a passive yield play. With Binance now accepting USYC as off-exchange collateral, the stablecoin issuer is quietly expanding the functional footprint of tokenized real-world assets in crypto’s institutional stack.
Summary
- Circle’s USYC stablecoin is now accepted as off-exchange collateral on Binance, enabling institutions to earn yield while posting margin.
- The move marks the first major exchange integration of a yield-bearing tokenized Treasury fund for derivatives trading.
On July 24, USDC issuer Circle announced that Binance would integrate its yield-bearing USYC stablecoin as eligible collateral for institutional derivatives trading, marking the first time a major exchange has enabled yield generation on margin assets.
The arrangement, facilitated through Binance’s triparty banking partners and custody arm Ceffu, allows clients to park USYC as backing for trades while earning returns akin to traditional money market funds.
Circle describes USYC as one of the “world’s leading” tokenized money market funds serving as a digital representation of a share of the Hash note International Short Duration Fund Ltd. Crucially, USYC’s near-instant convertibility to USDC provides an escape hatch for liquidity needs, a feature Circle executives pitched as critical for institutional adoption.
Circle and Binance’s USYC play
The partnership between Circle and Binance is a direct response to institutional demand for yield-bearing instruments that don’t force traders to choose between liquidity and returns.
Unlike traditional stablecoins, USYC’s underlying exposure to short-duration Treasuries enables institutions to maintain capital productivity even when deployed as margin. For Binance, the move is a strategic hedge against competitors courting institutional liquidity with their own tokenized Treasury products, from BlackRock’s BUIDL to Ondo Finance’s USDY.
“USYC’s integration with Binance unlocks new possibilities for institutional capital efficiency,” Kash Razzaghi, Chief Business Officer at Circle, said. “Its near-instant redemption into USDC makes it an obvious fit for modern collateral use in digital markets.”
Notably, Circle said USYC will be natively issued on BNB Chain, a technical detail with major implications. Native issuance means faster settlements, lower bridging risks, and deeper integration with Binance’s ecosystem, which are critical for high-frequency trading shops that rely on arbitrage between spot and derivatives markets.
It also signals Binance’s intent to position BNB Chain as a hub for institutional-grade RWAs, rather than just retail DeFi activity.
The timing is no accident. According to a recent Financial Times report, tokenized Treasury products have surged to $1.7 billion in 2025, with institutions increasingly treating them as a cash management tool rather than a speculative bet.
By adopting USYC, Binance appears to be future-proofing its infrastructure for a world where yield-bearing collateral becomes the baseline expectation, not an innovation.
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