Binance Partners With Circle to Enable Institutional USYC Collateral in Derivatives Trading

Binance has announced a partnership with Circle Internet Financial, a subsidiary of Circle Internet Group, to enable institutional clients to use USYC—a yield-bearing tokenized money market fund—as off-exchange collateral for derivatives trading. USYC, backed by U.S. Treasuries, allows users to earn yield while maintaining liquidity, distinguishing it from traditional stablecoins like USDC and Tether. The token will be issued natively on BNB Chain, with custody options provided through Binance Banking Triparty with authorized banks or Ceffu, Binance’s institutional-grade custody partner. This collaboration mirrors traditional finance practices, enabling traders to optimize capital efficiency by leveraging tokenized assets for collateral without locking liquidity [1].

The move aligns with rising institutional demand for tokenized U.S. Treasury products, a market that has nearly doubled in size since early 2025, according to Circle. Institutional traders increasingly seek digital assets that combine stable value, predictable yield, and blockchain programmability. USYC’s design allows seamless convertibility with USDC, enabling institutions to shift between tokenized cash and yield-bearing assets with minimal delay [2].

Circle’s Chief Business Officer, Kash Razzaghi, emphasized that the partnership advances agile collateral strategies in digital asset markets, while Binance’s Head of VIP & Institutional, Catherine Chen, highlighted the platform’s commitment to providing high-efficiency tools for professional traders. The integration reflects broader industry trends toward tokenization, where real-world assets are digitized to enhance accessibility and utility in DeFi and traditional finance ecosystems [3].

The stablecoin market has expanded significantly in 2025, with total supply surging from $204 billion to $252 billion in the first half of the year, according to CertiK’s report. However, the firm warned of uneven security practices and regulatory preparedness across the sector. Meanwhile, Circle’s stock price has faced downward pressure, declining 10.31% to $202.41 as of July 24. The recent selloff may reflect broader market sentiment, macroeconomic factors, or skepticism about the company’s strategic moves, including the USYC integration with Binance [4].

The partnership underscores the growing convergence between traditional finance and crypto markets. By offering yield-bearing collateral options, Binance and Circle aim to attract institutional clients seeking to optimize capital usage while adhering to familiar financial principles. The integration of USYC into Binance’s platform also highlights the potential for tokenized assets to redefine liquidity management in derivatives trading, though scalability and regulatory clarity will remain critical hurdles for widespread adoption [5].

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