Circle now controls the largest tokenized US Treasury product on any blockchain, with its USYC fund crossing $3 billion in assets under management. That puts the stablecoin giant ahead of BlackRock, a firm that manages roughly $10 trillion in traditional assets but finds itself playing catch-up in a corner of finance that didn’t exist a few years ago.
The milestone marks a notable shift in who’s winning the race to bring government debt onchain. BlackRock’s BUIDL fund sits at approximately $2.7B in AUM, while Ondo’s USDY holds around $2.1B.
How Circle got here
USYC wasn’t originally Circle’s creation. The product was developed by Hashnote, a firm focused on institutional-grade digital asset infrastructure. Circle acquired Hashnote in January 2025, picking up USYC and its growing base of institutional users in the process.
USYC overtook BlackRock’s BUIDL fund as the largest tokenized Treasury product back in March 2026, and the gap has only widened since.
The fund gives investors exposure to short-duration US Treasuries. USYC operates across multiple blockchain networks, making it programmable, composable, and usable as collateral in digital asset markets.
Circle’s existing dominance in stablecoins, through USDC, gives USYC a natural distribution advantage. The company has integrated USDC issuance with the USYC product, creating a seamless pipeline between dollar-denominated stablecoins and yield-bearing Treasury tokens.
The tokenized Treasury market heats up
Tokenized Treasuries offer yield, which stablecoins like USDC and USDT generally don’t pass through to holders. For a treasury manager or fund allocator sitting on large cash reserves, parking that capital in a tokenized Treasury product means earning government-backed interest while retaining the flexibility of blockchain-native assets.
What sets USYC apart, beyond raw size, is its utility as collateral. The ability to post yield-bearing Treasury exposure as margin or backing for other positions makes USYC functionally superior to holding raw stablecoins.
What this means for the market
Rather than building USYC from scratch, Circle bought Hashnote and its existing product, then scaled it using Circle’s distribution network and institutional relationships.
For DeFi protocols, 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.
The risk side of the equation deserves attention too. Concentrating $3B in tokenized Treasuries through a single issuer introduces counterparty considerations that don’t exist when holding actual Treasury bonds. Smart contract risk, custodial risk, and regulatory risk all come into play.