What Is USDY? Ondo's Tokenized Treasury Note, Explained

USDY trades at about $1.15, is not a stablecoin, and was listed at 3.75% APY when we checked on 18 October 2026, a rate that can change. Each of those facts confuses people who meet it for the first time on an exchange listing or a DeFi dashboard, because it sits in the same column as USDT and USDC while behaving like neither. A USDY token is a claim on a portfolio of short-dated US government debt, packaged so it can move between wallets like any other token, and sold only to non-US investors who clear an eligibility check that, in the UK, the EEA and several other markets, means proving professional investor status.

This explainer covers what USDY actually is, what backs it in October 2026, how the yield reaches your wallet, who is allowed to hold it, and how it compares with ordinary stablecoins and with BlackRock's BUIDL. If you want our view of Ondo Finance as a company, the wider product range and its track record, that lives in our Ondo review. This page stays on the token.

What USDY actually is

USDY, short for US Dollar Yield, is a tokenized secured note. Ondo's own documentation describes it that way, and the word note matters. You are lending money to an issuer that holds a pool of Treasury exposure, and in return you hold a debt instrument whose value rises as that pool earns interest.

The issuer changed recently, and most pages ranking for this search have not caught up. USDY was originally issued by Ondo USDY LLC. As of 15 December 2025 it was folded into what Ondo's docs now call the Ondo Stocks umbrella, and the docs name Ondo Global Markets (BVI) Limited, a British Virgin Islands company, as the issuer. Ondo Finance Inc., the Delaware company most people mean when they say Ondo, provides tokenization services to that issuer and holds equity in it. One panel on Ondo's product page still lists the issuer domicile as the United States, so if you read conflicting descriptions, the legal notices and the docs are the more specific source.

Two details in Ondo's legal notes are worth reading slowly. USDY gives holders economic exposure to short-term Treasuries, but the tokens are not Treasuries and do not give holders any right to hold or receive Treasuries. And the issuer is not registered as an investment company, so USDY is not a fund in the legal sense. What holders do get, per Ondo's stablecoin comparison, is a security interest in the backing assets, which is a legal claim on them. Ankura Trust Company acts on holders' behalf as collateral agent and verification agent, enforcing the eligibility criteria for those assets. If the issuer fails to meet a redemption request on time, that counts as an event of default. Ankura is then required to liquidate the portfolio and repay holders, but only if USDY holders approve it in a vote.

What backs USDY in October 2026

Most explainers still describe USDY as backed by Treasuries and bank deposits. That was the original design, and the docs still list bank demand deposits as possible collateral, but the live portfolio has moved. On Ondo's USDY page, the holdings snapshot dated 15 October 2026 showed 87.67% in US Treasuries, 12.30% in SHVon, a token issued by Ondo that represents shares of BlackRock's iShares 0 to 1 Year Treasury Bond ETF (ticker SHV), and about 0.03% in bank deposits. The weighted average maturity of the whole book, meaning the average time until its holdings mature with bigger positions counting for more, was around 185 days.

The ETF slice deserves a second look. Because it is held through SHVon rather than as ETF shares directly, part of USDY's backing sits one tokenization layer further from the bonds. The underlying asset is still very short Treasury paper. That is not a red flag on its own, and it is the kind of detail a careful holder should know about before treating USDY as interchangeable with a T-bill.

Ondo describes USDY as overcollateralized and publishes daily and monthly third-party attestation reports on the same page. For a sense of scale, USDY had a market capitalisation of roughly $2.35 billion and about 2.05 billion tokens in circulation on 18 October 2026, per CoinGecko, in line with the $2.36 billion TVL Ondo reports itself. That made it the second largest tokenized Treasury product tracked by rwa.xyz on the same day, at about $2.36 billion, just behind Circle's USYC and ahead of BlackRock's BUIDL, in a tokenized RWA market that keeps setting records.

How the yield reaches you, USDY vs rUSDY

Ondo sets USDY's yield rate once a month under the token's governing documents, and an on-chain price oracle compounds that rate day by day. The rate stood at 3.75% APY when we checked Ondo's page on 18 October 2026. Holders receive the portfolio's income minus fees, obligations and expenses, per Ondo's docs. The 15 October snapshot put the portfolio's yield to maturity at 4.13%, against that 3.75% headline. These are different measures. Yield to maturity is an estimate of what the holdings will earn if held until they mature, while the APY is the rate Ondo sets for holders after fees and expenses, so the gap between them is not a simple fee.

That design is also why USDY is quoted around $1.15 rather than $1. The standard version is an accumulating token. Your token count never changes, and the price per token climbs as interest accrues, so a USDY trading above a dollar is working as intended rather than drifting off a peg. Anyone comparing USDY with stablecoins on price alone will read it wrong.

For people who want a token that stays at a dollar, Ondo offers rUSDY, a rebasing version intended to keep a price of $1.00. Per Ondo's docs, each rUSDY corresponds to regular USDY held in a wrapper contract, and instead of the price rising, the wrapper adjusts your rUSDY balance each business day when the USDY price updates. Ondo's own example starts with 100 rUSDY while the USDY price moves from $1.00 to $1.01. Your balance becomes 101 rUSDY, because the wrapper has added tokens to reflect USDY's price rise, and each rUSDY is still intended to stay near $1. Ondo says holders can convert between the two through the Ondo Converter on its website.

The practical point is support. Some custodians, exchanges and DeFi protocols cannot handle rebasing tokens, which is why the accumulating version is the one you will see listed most often.

Who can hold USDY

This is where USDY stops looking like a stablecoin. It is offered under Regulation S of the US Securities Act, the exemption for offerings made outside the United States, so anyone who counts as a US person under Rule 902 is barred from subscribing for, acquiring or redeeming it. Ondo's eligibility page adds a list of prohibited jurisdictions that includes Canada, Russia, Iran, North Korea and several others.

The part most explainers skip is the second list. In the United Kingdom, every member state of the European Economic Area, Switzerland, Singapore, Hong Kong, Malaysia and Brazil, USDY is only available to people who qualify as professional, qualified, accredited or sophisticated investors under local rules. For individuals in the UK and the EEA, Ondo's guidance, subject to local rules, is that you generally need to meet two of three tests. Those are a financial portfolio of €500,000, ten significant trades a quarter over the previous four quarters, or a year working in the financial sector. So "available to non-US investors" really means available to non-US investors outside the restricted list, plus wealthier or professional investors inside it. Outside both lists Ondo's docs set no wealth threshold, though every buyer still passes KYC and the issuer keeps discretion to refuse anyone.

Secondary markets complicate the picture. USDY can be transferred between compatible wallets, including to someone who never onboarded with Ondo, and it trades on decentralized exchanges and some centralized ones. That transferability does not remove the eligibility rules. Ondo says the restrictions apply to anyone acquiring USDY, and the token contract checks a blocklist, so addresses on that list cannot send, receive or hold USDY.

Older guides also describe a 40 to 50 day waiting period before newly minted USDY became transferable, with buyers holding a token certificate in the meantime. LlamaRisk's archived overview documents that design from the token's early period. Ondo's current docs describe minting with USDC and earning from the moment the transaction is processed, and no longer mention the waiting period, so treat the 40 day figure as history and confirm current terms when you onboard.

If you do not meet USDY's investor tests, the options are different yield products, not equivalent Treasury notes. The EarnPark comparison below explains one such trade-off.

How minting and redemption work

Primary market access runs through Ondo. After onboarding you can mint USDY with USDC at any time, and USD bank wires are an option for deposits above $100,000. Ondo's product page advertises minting and redemption around the clock, weekends and bank holidays included. Under the hood, an on-chain manager contract handles subscriptions and redemptions against the oracle price, and it enforces per-user and global rate limits plus a minimum transaction size, so very small or unusually large orders can fail.

Redemption pays out either in USDC through Ondo Global Markets or in US dollars by bank wire, and the wire route only goes to non-US bank accounts. On Sui, Aptos, Stellar, the XRP Ledger and Noble, minting and redeeming goes through Ondo support with a $5,000 minimum. If you hold USDY bought on the secondary market and cannot pass onboarding yourself, your exit is selling it on the market, at whatever price buyers offer that day, rather than redeeming at the oracle price.

As of October 2026 Ondo lists USDY on Ethereum, Solana, Arbitrum, BNB Chain, Mantle, Sui, Aptos, Stellar, Sei, Noble and Tempo. BNB Chain was added in August 2026, per Ondo's announcement.

USDY vs stablecoins vs BUIDL

USDT and USDC issuers do not pay holders interest simply for holding the tokens. The reserves behind USDC do earn income, though. Circle, its issuer, reported $740 million of total revenue and reserve income in its third quarter 2025 results. In the United States the GENIUS Act, signed in July 2025, will go further. Once it takes effect, it bars issuers of payment stablecoins from paying holders interest or yield solely for holding the token. That has not happened yet. Final regulations are still at the proposal stage, and the Treasury expects the law to take effect on 18 January 2027. USDY is structured as a security rather than a payment stablecoin, and its terms pass the portfolio's income to holders net of fees and expenses. The price of that structure is everything in the previous two sections. Our guide to the safest stablecoins covers how the big reserve-backed coins compare on the other side of that trade.

BlackRock's BUIDL is the other name people put next to USDY. It is a tokenized fund that, per its launch announcement, invests in cash, US Treasury bills and repurchase agreements, aims for a stable $1 per token and pays yield as new tokens each month. It is tokenized by Securitize and offered only to a restricted class of investors with institution-sized minimums, starting at $5 million per the same release, so retail cannot buy it directly. Our BUIDL explainer goes through the fund and the wider tokenized Treasury race, in which USDY and BUIDL have traded places near the top of the leaderboard.

There are other yield-bearing dollars too, each with a different engine. Sky's sUSDS pays a rate set by governance vote rather than by the bond market, which our sUSDS review unpacks. USDY's engine is primarily short-duration Treasury exposure, including a tokenized Treasury ETF, with a small bank deposit share.

The risks worth pricing in

Rate risk is the first one. USDY's yield is reset monthly and follows short Treasury yields, so when the Federal Reserve cuts, holders feel it at the next reset. Today's 3.75% is a snapshot, not a floor.

Structure risk comes next. You hold a note from a BVI issuer, not the bonds, and your protection rests on the security interest, the collateral agent and the attestations working as documented. Ondo has built that stack carefully, but no publicly disclosed default has tested it so far.

Then there is control. The issuer can refuse onboarding, the contract checks a blocklist, and Ondo's developer docs describe the USDY contract on Mantle as an upgradeable proxy, which means its code can be changed. Those features exist for compliance, and they also mean USDY is a permissioned asset that happens to live on a public chain.

Liquidity is the last one to check before buying on the secondary market. If you cannot redeem with the issuer yourself, the price you get is whatever the market pays, and secondary prices can sit away from the oracle price during stress.

Where EarnPark fits for a stablecoin holder

If you are eligible and what you want is the US Treasury rate, delivered with a collateral agent and daily attestations, USDY is a cleaner instrument for that job than a yield platform like EarnPark. It is worth saying plainly, because the two get compared and they are not the same product.

EarnPark is a different bet. As of 18 October 2026 its asset pages list up to 15% APY on USDT and up to 10% on USDC. These are maximum advertised rates that vary by strategy, and reaching them does not require holding PARK. EarnPark has a native token, PARK, but its published rates require zero PARK, as the rate policy sets out. USDY's 3.75% is Treasury-linked income passed through a note, while EarnPark's top USDT rate comes from a Market-Exposed trading strategy with monthly payouts and withdrawals. The figures are not like for like. Some yield platforms quote a headline that only token holders or top loyalty tiers reach, and that is the comparison where EarnPark's open floor matters.

The source of the yield is the bigger difference from USDY. EarnPark's yield is not Treasury income. EarnPark runs a trading desk, and its page on yield sources names the strategies, mostly market making and liquidity providing, along with the years when specific strategies lost money. In plain terms, market making means quoting both buy and sell prices on exchanges and earning the difference, and liquidity providing means supplying tokens to trading pools in return for a share of their fees. Withdrawal terms differ by strategy too. On USDT, Maker Core pays daily, and withdrawals go through a bonding period of up to 30 days. The DeFi and Liquidity Providing strategies let you request a withdrawal at any time. The top of the range comes from the Market-Exposed Alpha Vault, which processes withdrawals monthly. A higher number comes with trading risk and platform risk that a Treasury note does not carry.

Transparency works differently as well. EarnPark publishes Proof of Reserves reports that it prepares and attests itself, so they are not an independent audit. The 10 October 2026 report put 76% of reserves on exchange accounts. USDY's attestations come from a third party every day. EarnPark does not use a professional investor test, but onboarding still involves identity checks and its own restrictions, so check the requirements before considering a deposit.

So who should hold USDY

USDY makes sense for a non-US holder who clears the eligibility rules, wants dollar exposure that earns roughly the T-bill rate, and is comfortable that the token price will keep climbing above a dollar. It is less useful if you are in a restricted jurisdiction without professional status, if you need a token pinned at $1 for payments and your venue does not support rUSDY, or if you are chasing a higher number than short government debt can pay. For that last group the honest next step is to compare where each product's yield comes from and what risk it carries before looking at the number, and the APY calculator can then show what a given rate means on your own balance.

If you hold USDT or USDC and want to see the published rates and each strategy's risk label and withdrawal terms before deciding, Start earning shows them in the app, and the published base rates do not require PARK.