Circle's USYC approved as collateral for institutional clients on Binance

Binance will begin accepting Circle’s yield-sharing stablecoin USYC as collateral for institutional clients, according to an announcement made on Thursday by its issuer and Circle Internet Group.

Per Circle’s press statement, the integration will allow institutional clients to use both USYC and cUSDO as collateral through Binance Banking Triparty and via Binance’s institutional custody partner, Ceffu. The arrangement lets users hold these assets off-exchange while accessing Binance’s trading platform and earn yield from their pledged collateral. 

Circle, now a publicly traded company listed on the New York Stock Exchange under the ticker CRCL, is the second-largest stablecoin issuer globally, through its parent product USDC. The company acquired USYC in January as part of the $1.5 billion asset manager Hashnote acquisition for an undisclosed amount.

Tokenized yield-bearing assets in institutional markets

USYC, short for US Yield Coin, represents interests in the Hashnote International Short Duration Yield Fund Ltd, a tokenized money market fund registered in the Cayman Islands. The fund primarily invests in reverse repurchase agreements backed by US government securities. 

As a tokenized representation of this fund, USYC provides interest proceeds to holders and offers near-instant conversion into USDC, and is also natively issued on BNB Chain.

Alongside USYC, Binance will also accept cUSDO, a wrapped version of OpenEden’s rebasing yield-bearing stablecoin USDO. Issued by Bermuda-regulated OpenEden Digital, cUSDO is backed by reserves consisting of US Treasury bills and reverse repurchase agreements.

Much like USYC, cUSDO earns yields for holders and is regulatory compliant for institutional investments.

Catherine Chen, Head of Binance VIP & Institutional, said the move reiterates Binance’s commitment to improving user experience through the tokenization of real-world assets. 

“By supporting USYC and cUSDO on Binance Banking Triparty and through our custody partner Ceffu, we are offering our institutional clients more choices to optimize their capital efficiency while balancing risk control requirements,” Chen stated. 

Circle’s Chief Business Officer, Kash Razzaghi, supported her sentiments, saying the integration brings “capital efficiency and risk-managed optionality” to institutional participants. 

“Making USYC available as off-exchange collateral with yield potential helps us bridge traditional finance and blockchain-powered markets,” he continued.

According to data from June 2025 from RWA.xyz, the value of tokenized RWAs, excluding stablecoins, had surged to $24 billion, up from $15.2 billion in December 2024. 

Analysts suggest RWA could take up 30% of traditional financial assets and exceed $400 trillion by 2034. That would mark an increase of more than 100-fold over the current $3 trillion crypto market capitalization.

Circle’s stock is still in freefall 

Despite Circle’s USYC adoption announcement today, its public stock fell by 2% as of Thursday’s US pre-market session, even as the S&P 500 gained 0.7% and the Nasdaq Composite went up 0.6%.

The drop followed last week’s downgrade from Compass Point, an investment bank that slashed its rating on Circle from “neutral” to “sell.” The analyst said there were two primary reasons they brought down ratings, including competition in the stablecoin market and valuation pressures. Compass Point lowered its price target for Circle from $205 to $130.

The shares shed 5% on July 15 after the US House of Representatives delayed the passage of the stablecoin GENIUS Act. Compass Point noted that market reactions tend to be muted after such events. 

“Crypto investors typically sell the news after highly anticipated events,” the analyst wrote, suggesting that CRCL may pull back after its recent rally. Interestingly, the shares rose to $233 the following day after the House passed the bill and sent it to the White House for President Donald Trump to sign.

Cryptopolitan Academy: Want to grow your money in 2025? Learn how to do it with DeFi in our upcoming webclass. Save Your Spot