Coin columns · Ethereum City (Capital)

USDY: Ondo’s Tokenized Note That Earns US Treasury Yield

Looks like a dollar stablecoin but isn’t: how it works

USDY (Ondo US Dollar Yield) is a blockchain token representing a note backed by short-term US Treasuries and bank deposits. Because interest builds up just by holding it, it is often called a ‘yield-bearing stablecoin’, but legally it is closer to a security.

1. Who makes it

USDY comes from Ondo Finance, founded in 2021 by former Goldman Sachs executive Nathan Allman to tokenize real-world assets (RWA), moving traditional financial products onto blockchains. USDY launched in August 2023 and is issued by a separate entity set up for it.

USDY is for individuals and institutions outside the United States; US residents cannot buy it. Minting or redeeming directly with Ondo requires identity checks (KYC), and newly bought tokens can be moved to another wallet only after a holding period. On the Crypto Nation map, USDY stands in Ethereum City (the capital), because it was first issued on Ethereum.

2. How the yield works

USDY is backed by short-term US Treasuries and bank demand deposits. Interest is reflected in the token price, so one USDY slowly becomes worth more than a dollar. Unlike a stablecoin fixed at one dollar, what matters is how much its value has grown.

For those who prefer a one-dollar price with a growing number of tokens, there is a rebasing version, rUSDY. Ondo says the collateral sits in a bankruptcy-remote structure, with an independent collateral agent protecting investors’ rights, and the collateral position is published regularly.

3. Where it is used

Starting on Ethereum, USDY has been issued on many chains, including Solana, Mantle, Sui, Aptos, Arbitrum, Stellar and Noble in the Cosmos ecosystem. It trades on decentralized exchanges, serves as lending collateral and acts as a yield-bearing dollar inside other apps, giving users outside the US a route to dollar interest.

Ondo also runs OUSG, a Treasury token for institutions, and the governance token ONDO, and in 2025 it opened Ondo Global Markets, bringing US stocks and ETFs on-chain. As tokenized Treasuries grew, USDY became one of the field’s best-known products, born of demand to earn Treasury yield on ‘idle dollars’ kept on-chain.

4. Things to know

USDY is not an insured bank deposit, and despite its name it is not a stablecoin fixed at one dollar. Returns and risks depend on the institutions holding the collateral, the issuing entity’s structure and US interest rates, and redemptions follow only the terms in Ondo’s documents. When rates fall, so does the yield.

With no access for Americans, identity checks and transfer limits, it differs from coins anyone can use freely. Securities rules for real-world-asset tokens vary by country and may change. On-chain, smart-contract bugs and the security of bridges between chains add technical risk.

Written from information public up to October 2026. It does not recommend or rate any coin and is not investment advice. If something is wrong, please tell us through the contact page.