Circle Moves $2.4 Billion USYC Fund Into Longer-Duration Treasury Bills

Circle said Nov. 9 that the fund behind USYC has moved from being predominantly invested in overnight reverse repo into longer-duration U.S. Treasury bills, while USDC subscription and redemption flows stay exactly as they were. The shift affects the largest tokenized Treasury product on the market, valued at $2.403 billion in an Oct. 9 snapshot of the category.

The announcement was spare on detail. "Same token. Same issuer. Same subscribe and redeem flows in USDC," Circle wrote. The company did not disclose an updated weighted average maturity, a current yield, or the share of the portfolio now sitting in Treasury bills. That leaves institutions holding USYC without fresh numbers on duration risk or expected returns.

What is USYC, exactly?

USYC represents shares in Hashnote International Short Duration Fund Ltd. The fund invests in Treasury bills with maturities of up to six months — a meaningful stretch beyond overnight instruments. USYC functions as yield-bearing collateral for institutional use, with returns accruing through the token's price rather than through separate distributions.

Access is narrow by design. The listed starting investment is $100,000, and USYC shares are available only to non-U.S. persons. The product is also distinct from USDC itself, which serves as the rail for subscriptions and redemptions rather than as the underlying asset.

Where does USYC sit in the tokenized Treasury market?

The category context matters here. In the Oct. 9 snapshot of tokenized Treasury funds, the broader market held $14.95 billion in distributed value. USYC, at $2.403 billion, was the largest listed product in that category, ahead of competitors including USDY, BUIDL and iBENJI.

So what does this change for institutions? Operationally, not much on the surface. The token, issuer and USDC flows are unchanged. The real shift is in portfolio composition — moving from overnight reverse repo to bills maturing in up to six months typically means greater exposure to interest rate movements and slightly higher expected yield in exchange for that duration. But without Circle publishing a new weighted average maturity or yield, holders are left to infer the trade-off from the mandate alone.

Circle's reticence on numbers is notable for a product of this size. A $2.4 billion fund changing its core asset mix is a material operational decision, and the company framed it in the briefest possible terms. For compliance teams and treasury desks evaluating USYC as collateral, the lack of disclosed allocation percentages creates a due-diligence gap they will need to press on.

The move also signals where Circle sees the tokenized collateral business heading. Longer-duration bills can capture more carry than overnight instruments when rates hold steady, and the shift suggests Circle is optimizing the fund's yield profile for institutional holders rather than maximizing liquidity at every moment.

The tokenized Treasury category itself continues to grow, with USYC anchoring the top of a $14.95 billion market. Whether Circle follows this portfolio shift with fuller disclosure — an updated weighted average maturity, a current yield, a Treasury bill allocation figure — will shape how easily institutions can keep justifying USYC's place atop that ranking in coming quarters.