Stablecoin giant Circle has expanded the availability of its tokenized money market fund, $USYC, to the Solana blockchain. $USYC represents shares in a short-duration U.S. government money market fund and is redeemable into $USDC in real time. With this move, Circle adds Solana to a growing list of supported networks, which already includes Ethereum, Base, and NEAR.
$USYC’s arrival on Solana opens the door for eligible non-U.S. institutional investors to subscribe, redeem, and deploy the fund in onchain applications. The product remains permissioned and requires institutions to pass KYC checks and undergo wallet allow-listing before participation.
Circle had previously acquired Hashnote, the issuer of the US Yield Coin ($USYC), in January.
Why Solana Matters for $USYC
Solana was an obvious next step for $USYC. With infrastructure built for low-latency confirmations and high throughput, the network is an appealing venue for onchain financial products. For Circle, this means Solana can provide a high-performance environment for yield-bearing collateral while maintaining eligibility safeguards.
The integration also aligns with Solana’s growing role in tokenized real-world assets (RWAs). By combining high throughput with a strong developer ecosystem, Solana offers a platform where $USYC can function efficiently as programmable collateral.
Institutional Use Cases
The availability of $USYC on Solana introduces new opportunities for digital asset protocols:
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Borrowing and lending markets: Listing $USYC enables lenders to earn the underlying yield while still providing liquidity. Borrowers may also benefit from reduced costs since collateral continues to accrue interest.
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Margin collateral on derivatives platforms: Perpetual DEXs can accept $USYC as collateral, allowing traders to earn yield on posted margin.
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Automated yield strategies: Vault protocols can integrate $USYC to create structured yield products that build on its daily price updates.
Unlike permissionless stablecoins, $USYC cannot circulate freely across the decentralized finance ecosystem. Institutions that wish to use it must clear eligibility hurdles, and DeFi protocols must adapt to permissioned flows. This restricts its utility compared to traditional stablecoins but ensures compliance with regulatory frameworks. As a result, $USYC will primarily serve institutional participants rather than retail users.
The Bigger Picture: Yield-Bearing Stablecoins
$USYC is currently the fifth-largest tokenized treasury product with a market capitalization of $634 million, part of a broader $8 billion tokenized treasury market according to RWA.xyz data. The sector has experienced sharp growth over the past year, driven by institutional demand for yield-bearing digital assets backed by real-world securities.
JPMorgan’s recent analysis highlights strong growth prospects for what it describes as “yield-bearing stablecoins,” a category encompassing tokenized money market funds (MMFs) and Treasury bill products.
According to Nikolaos Panigirtzoglou, Managing Director at JPMorgan, these instruments could grow to represent as much as half of the stablecoin market. In scenarios where stablecoins remain barred from offering yield directly, tokenized MMFs are likely to take the lead as the preferred option.
Will Every Stablecoin Have a Yield-Bearing Equivalent?
The launch of $USYC on Solana raises a broader question: will every stablecoin eventually have a yield-bearing counterpart? Traditional stablecoins, such as $USDC and $USDT, provide dollar stability but not direct returns. Tokenized MMFs, such as $USYC, combine price stability with yield, although they remain restricted to institutional users. The appeal lies in their ability to serve as both collateral and income-generating instruments.
The future may depend on regulatory outcomes and technological adoption. If frameworks evolve to permit yield-bearing features in widely accessible stablecoins, retail users could see products similar to $USYC designed for broader use. Until then, institutions will likely continue to drive demand for tokenized funds that deliver both liquidity and yield.
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