Circle Shifts USYC Fund From Overnight Repos Into Treasury Bills

Circle has moved the fund behind its USYC tokenized money market product from predominantly overnight reverse repurchase agreements into longer-dated U.S. Treasury bills, the company announced on November 9. The token, its issuer, and the USDC-based subscription and redemption processes remain unchanged.

The shift restructures how roughly $313 million in assets under management — Circle's published figure as of October 27, 2026 — is invested. Under the updated structure, the fund holds U.S. Treasury bills with maturities of up to six months, according to Circle's product information. The company did not disclose the fund's updated weighted average maturity, its current yield, or the proportion of assets now sitting in Treasury bills.

USYC represents shares in the Hashnote International Short Duration Fund Ltd., a Cayman Islands-registered mutual fund. Circle International Bermuda Limited serves as token administrator under a Bermuda Monetary Authority digital asset business license. crypto.news contacted Circle for comment; the company had not responded by press time.

What does the portfolio change mean in practice?

The previous allocation relied primarily on overnight reverse repos — lending cash against securities for very short periods. That structure minimized interest-rate risk but reset yield continuously with short-term market rates.

Treasury bills work differently. They pay returns through the spread between purchase price and face value at maturity. Longer maturities let the fund lock in the yield available at purchase until the securities mature, rather than repricing daily.

The trade-off is duration. Treasury bill prices can move before maturity as market interest rates shift, and longer maturities generally carry more interest-rate exposure. For an institutional investor holding USYC as trading collateral, that means the product's net asset value now responds more to rate expectations than it did under an overnight-repo profile.

What stays the same for holders?

Circle confirmed that every operational layer around the token is untouched:

• Subscriptions and redemptions continue to use USDC.
• The issuer and token arrangements are unchanged.
• Redemptions within available instant-redemption capacity settle onchain within one block; larger requests generally settle the same or next business day.
• Minimum investment remains $100,000.
• Subscription and redemption fees remain 0.04% and 0.03% respectively, waived on the first $1 million in qualifying combined daily volume.
• A performance fee of 10% of yield continues to apply.
• Access remains restricted to eligible non-U.S. persons, with support on Ethereum, Solana, BNB Chain, NEAR, Canton, and Arc.

Unlike USDC, USYC is a yield-bearing investment product: returns accumulate through changes in the token price rather than separate interest payments. Token balances, prices, and yield data are published through an onchain oracle feed.

Collateral use at Binance and beyond

The portfolio change matters most for the product's use as derivatives collateral. In July 2025, Binance enabled eligible institutional customers to use USYC as off-exchange collateral for derivatives trading, with custody and triparty infrastructure keeping the tokens outside the exchange's direct custody. Holders pledge tokens while retaining exposure to the fund's returns, and Circle said the structure supports conversion into USDC when liquidity is required.

Circle's announcement did not specify whether the revised Treasury holdings would change collateral valuations, margin haircuts, or redemption arrangements at participating venues, and it provided no details on any notification process involving exchanges that accept USYC.

The Binance relationship has deepened separately. An October agreement between the two companies included a $100 million investment and a five-year USDC arrangement, building on earlier stablecoin cooperation and the USYC collateral integration.

How Circle got here

Circle acquired Hashnote in January 2025, bringing the tokenized money market business in-house. In March 2025, Circle announced plans to bring the fund under its existing Bermuda digital asset business license, connecting USYC with USDC for institutional subscriptions and redemptions. The fund itself began operations in January 2023, before the acquisition.

What does this change for practitioners? Operationally, nothing; on a risk basis, the duration they underwrite has lengthened. Institutions should watch whether Circle publishes updated weighted-average-maturity and yield figures, and whether collateral counterparties adjust valuation terms as the new Treasury holdings season.