USDY (US Dollar Yield Token) is not just another stablecoin—it’s a next-generation digital asset that blends the stability of the US dollar with real, yield-generating underlying assets. Designed for non-US investors seeking accessible, compliant exposure to high-quality US dollar-denominated yield, USDY offers a unique value proposition in the evolving landscape of tokenized finance.
Backed by short-term US Treasuries and bank demand deposits, USDY combines regulatory compliance with blockchain efficiency, offering global investors a secure way to earn yield without sacrificing principal stability.
What Is USDY?
USDY is a tokenized note that represents ownership in a portfolio of short-term US Treasury securities and cash held in FDIC-insured banks. Unlike traditional stablecoins that aim solely for price stability, USDY is engineered to generate yield from day one—while still maintaining full dollar denomination.
Two versions of USDY are available:
- USDY (Accumulating Version): The token price increases over time as yield accrues. For example, if you hold 100 USDY tokens initially priced at $1.00 each, after a month of yield accumulation, those same 100 tokens might be worth $1.01 each.
- rUSDY (Rebasing Version): The price remains fixed at $1.00, but the number of tokens in your wallet increases daily to reflect accrued yield. If you hold 100 rUSDY and yield accumulates, you might soon hold 101 tokens—still valued at $1.00 each.
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This dual-token model allows users to choose between simplicity (rUSDY) and capital appreciation tracking (USDY), depending on their investment preferences or accounting needs.
How Does USDY Work?
The USDY ecosystem operates through a structured, compliance-first process designed to meet US financial regulations while enabling global access.
Step 1: Onboarding & KYC
Before investing, users must complete a Know Your Customer (KYC) verification process. This ensures compliance with US securities laws and confirms eligibility—specifically, that the investor is not a US person and resides in an approved jurisdiction.
Once verified, you’ll provide:
- A cryptocurrency wallet address to receive tokens
- Signed legal agreements, including the Tokenized Credit and Security Agreement
No personal data or funds are processed until full compliance is confirmed.
Step 2: Deposit & Investment
After onboarding:
- You’ll receive confirmation of your investment eligibility.
- Deposit USDC (or, for amounts over $100,000, via USD wire transfer).
- Interest begins accruing immediately upon fund processing—typically within 2–3 business days.
You don’t need to wait for token issuance to start earning. Yield accumulation starts right away.
Step 3: Cohort Assignment & Certificate Issuance
Each investor is assigned to a cohort based on their deposit timing. This structure ensures regulatory compliance by staggering token minting in accordance with securities laws.
Upon deposit processing, you receive a Temporary Global Certificate, which:
- Proves your ownership stake
- Specifies the date when your transferable USDY tokens will be minted (between 40–50 days post-deposit)
This waiting period is a legal requirement—not a technical limitation—and applies uniformly across all investors.
Step 4: Token Minting & Transfer
Once the cohort timeline concludes, your USDY tokens are minted and sent to your designated wallet. At this point:
- Tokens become fully transferable
- Can be moved freely within eligible jurisdictions
- Begin earning daily rebasing (if holding rUSDY)
How rUSDY Works: The Mechanics of Rebasing
rUSDY functions as a “wrapped” version of USDY, where the underlying USDY tokens are locked in a smart contract that dynamically adjusts supply to maintain a $1.00 price.
Here’s how it works:
- When you convert USDY → rUSDY: Your USDY is locked in a contract; an equivalent dollar value of rUSDY is minted and sent to your wallet.
- When you convert rUSDY → USDY: Your rUSDY is burned; the corresponding USDY is unlocked and returned.
For example:
- You deposit 1,000 USDY at $10.00 each → $10,000 value
- The wrapper mints 10,000 rUSDY (because $10,000 ÷ $1.00 = 10,000)
- As yield increases the value of the underlying assets, the system automatically rebases, increasing your rUSDY balance to maintain $1.00 per token
This rebasing happens daily, ensuring consistent pricing while delivering compound-like growth.
Total Value Locked (TVL) Calculation
Because rUSDY is backed by locked USDY, calculating total ecosystem value requires care to avoid double-counting:
Total USDY TVL = (Number of rUSDY × $1.00) + (Non-Wrapped USDY × Current Token Reference Price)Alternatively:
Total USDY TVL = Total USDY Tokens × Current Token Reference PriceBoth formulas yield the same result when properly accounting for wrapped vs. non-wrapped balances.
Redemption Process
Redemption is designed for compliance and security:
- Only available via bank wire to non-US bank accounts
- Requires verified bank details
- For Temporary Global Certificates: Redemption only permitted for balances >$100,000
- Smaller amounts must wait until token minting
This structure protects both investors and issuers under US financial regulations.
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Frequently Asked Questions (FAQ)
Q: When do I start earning yield?
A: Yield begins accruing as soon as your deposit is processed—typically within 2–3 business days—even before tokens are minted.
Q: Can I convert between USDY and rUSDY?
A: Yes. Conversion between USDY and rUSDY is instant, free, and available anytime via the Ondo platform.
Q: Why does it take 40–50 days to receive tokens?
A: This delay ensures compliance with US securities laws. The Temporary Global Certificate guarantees your rights during this period.
Q: Is USDY available to US investors?
A: No. USDY is not offered or sold in the United States or to US persons due to regulatory restrictions.
Q: How is the yield determined?
A: Yield is derived from short-term US Treasuries and bank deposits. The Token Reference Price updates daily based on accrued interest.
Q: What happens if I need liquidity before token minting?
A: Early redemption is only available for investments over $100,000. Otherwise, you must wait until your cohort’s minting date.
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Core Keywords
- USDY token
- yield-bearing stablecoin
- tokenized US Treasuries
- rUSDY rebasing
- non-US investor crypto
- compliant digital assets
- blockchain yield generation
- Ondo Finance
Final Thoughts
USDY represents a major step forward in bridging traditional finance with decentralized systems. By combining regulatory compliance, transparent asset backing, and automated yield delivery, it offers a compelling alternative to conventional stablecoins—especially for international investors seeking dollar-denominated returns.
With flexible options like rUSDY for stable pricing and USDY for capital appreciation tracking, users gain unprecedented control over how they experience yield in the digital asset space.
As tokenized real-world assets (RWA) continue to gain traction, products like USDY are setting the standard for security, transparency, and global accessibility.