Circle Binance Partnership Enables Yield-Bearing USYC as Institutional Derivatives Collateral

Circle Internet Financial, the stablecoin issuer behind USDC, has partnered with Binance to allow institutional clients to use its yield-bearing stablecoin, USYC, as collateral for derivatives trading. USYC, a tokenized money market fund (TMMF) backed by U.S. Treasuries, is now supported as off-exchange collateral on Binance’s institutional trading platform, enabling users to generate yield while maintaining liquidity for capital-efficient trading. The collaboration mirrors traditional finance practices, offering institutions the ability to leverage tokenized assets for derivatives without sacrificing returns on idle balances [1].

USYC, acquired by Circle earlier in 2025, distinguishes itself from standard stablecoins by redistributing yields to holders. The token operates on BNB Chain and is designed for near-instant convertibility with USDC, allowing institutions to shift between stable value and yield-bearing assets with minimal delay. Custody solutions for USYC will be provided through Binance Banking Triparty with authorized banks or Ceffu, a institutional-grade custody partner [2]. This integration aligns with rising institutional demand for tokenized U.S. Treasuries, a market segment Circle notes has nearly doubled in size since the start of 2025 [3].

The partnership underscores a broader trend toward tokenized real-world assets (RWAs) in institutional markets. Executives from both firms emphasized the strategic value of combining blockchain programmability with traditional financial tools. Kash Razzaghi, Circle’s Chief Business Officer, stated the collaboration enables “more agile collateral strategies” in digital asset markets, while Catherine Chen, Binance’s Head of VIP & Institutional, highlighted the platform’s commitment to providing “trusted, high-efficiency tools” for professional traders [4].

The move arrives as stablecoin adoption expands, with total market supply reaching $252 billion in early 2025, driven by increased institutional participation and use cases such as cross-border settlements. However, CertiK’s 2025 Stablecoin Report warns of uneven security and regulatory preparedness across the sector, urging caution amid rapid growth [5].

Circle’s stock price, which closed at $202.41 on July 24—a 10.31% decline over five days—reflects ongoing market volatility. Despite the downturn, the company maintains a $45.04 billion market cap, though recent selloffs may signal investor caution around macroeconomic conditions or skepticism about USYC’s integration with Binance [6].

The partnership positions USYC as a bridge between traditional and digital markets, offering institutions a way to access yield while participating in derivatives trading. As tokenized Treasuries gain traction, the collaboration could accelerate the adoption of blockchain-based financial instruments, further blurring the lines between legacy and crypto ecosystems.

Source:

[1] https://cryptonews.com/news/binance-to-accept-circles-yield-bearing-stablecoin-usyc-as-institutional-collateral/

[2] https://cryptonews.com/news/binance-to-accept-circles-yield-bearing-stablecoin-usyc-as-institutional-collateral/

[3] https://cryptonews.com/news/binance-to-accept-circles-yield-bearing-stablecoin-usyc-as-institutional-collateral/

[4] https://cryptonews.com/news/binance-to-accept-circles-yield-bearing-stablecoin-usyc-as-institutional-collateral/

[5] https://cryptonews.com/news/binance-to-accept-circles-yield-bearing-stablecoin-usyc-as-institutional-collateral/

[6] https://cryptonews.com/news/binance-to-accept-circles-yield-bearing-stablecoin-usyc-as-institutional-collateral/