Overnight repo transactions are effectively short-term collateralized loans. The borrower is selling a security – in this case, U.S. Treasurys – for cash, and agrees to buy back the collateral the next day for a slightly higher price. What’s really happening, though, is that big institutional investors with cash to spare are parking that with Wall Street dealers that need funding.
Source: https://www.coindesk.com/business/2023/05/17/usdc-issuer-circle-moves-87b-to-repo-agreements-to-protect-reserves-from-us-government-default/?utm_medium=referral&utm_source=rss&utm_campaign=headlines