Binance Integrates USYC and cUSDO as Yield-Generating Collateral for Institutional Derivatives via Circle Partnership

Binance has expanded its institutional offerings by integrating two yield-generating stablecoins, USYC and cUSDO, as collateral for off-exchange derivative positions. This move, facilitated through a partnership with stablecoin issuer Circle, allows institutional clients to earn returns on their holdings while maintaining liquidity in the crypto market. USYC, a tokenized money market fund, is backed by U.S. Treasuries and operates on BNB Chain, enabling near-instant conversions to USDC. cUSDO, issued by OpenEden, offers similar exposure to tokenized Treasuries. The integration aims to bridge traditional finance (TradFi) mechanisms with blockchain infrastructure, providing institutions with capital-efficient tools that mirror the security of traditional instruments while operating on-chain [1].

The collaboration between Binance and Circle highlights the growing convergence of crypto and traditional asset classes. By enabling USYC as collateral, Binance allows clients to generate yield without locking liquidity in smart contracts—a common limitation in on-chain collateral models. This aligns with broader efforts to tokenize real-world assets (RWA) and expand their utility within decentralized ecosystems. Catherine Chen of Binance noted that the addition of cUSDO enhances options for capital-efficient trading, addressing institutional demand for safer yield opportunities [2].

Analysts suggest the move reflects increased appetite for risk-managed liquidity solutions in crypto markets. Demand for tokenized yield products has nearly doubled since early 2025, driven by institutions seeking to balance returns with stability. Both USYC and cUSDO leverage tokenized Treasuries to offer transparency and asset-backed security, addressing regulatory and operational concerns that have historically hindered institutional adoption. Social sentiment and trading data indicate strong confidence in these tokens, with cUSDO showing consistent volume and a healthy premium [3].

Circle’s expansion of USYC’s utility underscores its strategy to tokenize diverse RWA, with the stablecoin now integrated into Binance’s institutional infrastructure. Kash Razzaghi, Circle’s Chief Business Officer, emphasized that the integration accelerates capital flow across digital markets, allowing institutions to access Treasury-like yields without exiting the crypto ecosystem. However, details about cUSDO’s yield mechanisms remain limited under OpenEden’s disclosure policies, potentially affecting transparency for cautious investors [4].

The development also highlights Binance’s role in bridging traditional and crypto-native assets. By leveraging off-exchange custody solutions like Binance Banking Triparty and Ceffu, the platform ensures secure storage and management of these tokens. This approach contrasts with on-chain models, which often require liquidity to be immobilized in smart contracts. The move positions Binance as a key player in legitimizing crypto as a mainstream asset class, though long-term stability of yield-bearing models in volatile markets remains a topic of debate [5].

As regulatory scrutiny intensifies, the use of U.S. Treasuries as collateral adds a layer of credibility to these tokens. Nevertheless, challenges persist in scaling adoption, particularly around governance frameworks and auditable asset records. Binance’s integration of USYC and cUSDO aligns with broader industry trends, signaling a shift toward hybrid models that combine traditional safety with blockchain efficiency. With other exchanges likely to follow, the competition to innovate in tokenized RWA is accelerating [6].

Source:

[1] [Binance adds USYC as Circle expands footprint of its yield-...](https://fortune.com/crypto/2025/07/24/binance-circle-usyc/)

[2] [Circle's USYC Now Supported as Yield-Bearing Off-...](https://www.circle.com/pressroom/circles-usyc-now-supported-as-yield-bearing-off-exchange-collateral-for-binances-institutional-clients)

[3] [Binance integrates Tokenized Real-World Assets USYC ...](https://ktla.com/business/press-releases/cision/20250724CN36903/binance-integrates-tokenized-real-world-assets-usyc-and-cusdo-into-off-exchange-settlement-solutions)

[4] [Binance Adds Support for Yield-Based Stablecoins USYC ...](https://blockonomi.com/binance-adds-support-for-yield-based-stablecoins-usyc-and-cusdo-as-collateral/)

[5] [Circle and Binance Push Stablecoin Innovation with USYC](https://coincentral.com/circle-and-binance-push-stablecoin-innovation-with-usyc/)

[6] [BNB Chain Integrates Circle's USYC Stablecoin Backed by ...](https://www.ainvest.com/news/bnb-chain-integrates-circle-usyc-stablecoin-backed-treasuries-expand-rwa-ecosystem-2507/)