Binance To Integrate Circle’s USYC Stablecoin: Details

Leading crypto exchange Binance has announced that it will now accept USYC. As reported, the exchange will now use the token, one of the biggest stablecoins from Circle as collateral for institutional clients.

This move is expected to make trading smoother for traditional investors and strengthen the connection between cryptocurrency and traditional finance.

Binance and Circle Team Up on New Collateral Option

Binance said on Thursday that it would begin accepting USYC as collateral from its institutional clients.

It is worth noting that USYC is a stablecoin issued by Circle that gives holders a share of the yield it earns.

The decision marks another step in the growing connection between crypto exchanges and traditional finance.

Circle became the issuer of USYC earlier this year after acquiring the coin through a larger deal.

Unlike most stablecoins, such as USDC or Tether, USYC is backed by a money market fund.

This means it is tied to interest-earning assets and passes some of that interest to those who hold it.

According to Kash Razzaghi, Circle’s Chief Business Officer, many institutional traders already use money market assets as collateral when trading on platforms like Binance.

However, these assets can take a full day or longer to settle, especially on weekends when banks are closed.

As mentioned in the report, USYC could solve that problem. It can be quickly swapped for USDC, another stablecoin from Circle that is widely accepted and easily transferable.

Interestingly, this would make it more practical for traders who want faster transactions.

Catherine Chen, who leads Binance’s institutional client group, said some traders are still cautious about using crypto as collateral.

For context, the collapse of FTX in 2022 made some firms nervous about leaving assets on an exchange.

To alleviate these concerns, Binance developed a system called Banking Triparty. It lets banks hold the collateral instead of Binance.

These same banks are now working with Binance to support USYC as well. The goal is to make trading faster without giving up safety.

Circle Looks to Gain Ground in the U.S. Market

The move to bring USYC into Binance’s platform is part of a bigger effort by Circle to expand in the United States.

Circle is now a public company and has set its sights on attracting more large financial players.

USYC differs from Circle’s other stablecoin, USDC, in that it offers a return. This feature could appeal to institutions seeking stable assets that also generate income.

Again, Circle’s acquisition of USYC earlier this year was aimed at broadening its product line.

By bringing USYC to Binance, Circle could reach a wider group of institutional users. It also provides users with an additional option for secure and fast trading.

Tether Prepares U.S. Launch as Market Competition Grows

Tether, the company behind USDT, said it is preparing to begin operations in the United States.

In a recent interview with Bloomberg Television, CEO Paolo Ardoino confirmed that the company is shaping its strategy for the U.S. and expects to announce it within two months.

This update came shortly after the signing of the GENIUS Act, a new law aimed at guiding the use of stablecoins in the country.

During the signing, President Donald Trump publicly thanked Ardoino for his role in developing the sector.

According to Ardoino, the company plans to launch a new stablecoin designed for institutional clients in the U.S.

He made it clear that Tether does not plan to go public, setting it apart from Circle, its main competitor.

Meanwhile, the U.S. market is now expected to be competitive. Several major banks, including JPMorgan, Bank of America, Citigroup, and Wells Fargo, are reportedly developing their own stablecoin offerings.

Ardoino acknowledged that these firms may perform better at first due to their presence in the local market.

Still, he said Tether’s technical experience and long-term focus could give it an edge over time.