Circle's USYC fund crossed $3B in assets, overtaking BlackRock's BUIDL to become the largest tokenized Treasury product. The Hashnote acquisition and USDC integration give Circle a distribution edge.
Alpha Score of 66 reflects moderate overall profile with strong momentum, weak value, moderate quality, strong sentiment.
Circle took the lead in the tokenized Treasury market with its USYC fund crossing $3 billion in assets under management. The product now sits ahead of BlackRock's BUIDL, which holds roughly $2.7 billion, and Ondo's USDY at about $2.1 billion, according to data from rwa.xyz.
USYC was not originally built by Circle. The fund was developed by Hashnote, a firm focused on institutional digital asset infrastructure. Circle acquired Hashnote in January 2025, picking up the product and its base of institutional users. USYC overtook BlackRock's BUIDL in March 2026, and the gap has widened since, Circle said in a statement.
The fund gives investors exposure to short-duration US Treasuries, and it operates across multiple blockchain networks. That makes the token programmable, composable, and usable as collateral in digital asset markets. Circle's dominance in stablecoins, through USDC, provides a natural distribution channel. The company has integrated USDC issuance with USYC, creating a pipeline between dollar-denominated stablecoins and yield-bearing Treasury tokens.
Tokenized Treasuries offer yield, which stablecoins like USDC and USDT generally do not pass through to holders. For a treasury manager or fund allocator holding large cash reserves, parking capital in a tokenized Treasury product means earning government-backed interest while keeping the flexibility of blockchain-native assets, the company said.
What sets USYC apart, beyond its size, is its utility as collateral. The ability to post yield-bearing Treasury exposure as margin or backing for other positions makes it functionally superior to holding raw stablecoins, according to industry analysts. Rather than building USYC from scratch, Circle bought Hashnote and scaled the product using its own distribution network.
The expansion of high-quality onchain collateral like USYC means DeFi's collateral base becomes more closely tied to traditional financial instruments, replacing volatile crypto collateral with government-backed securities, analysts said.
The risk side of that equation deserves attention. Concentrating $3 billion in tokenized Treasuries through a single issuer introduces counterparty considerations that do not exist when holding actual Treasury bonds. Smart contract risk, custodial risk, and regulatory risk all come into play, several analysts noted.
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