$USDY is not a stablecoin. It is a tokenized note backed by short-term US Treasuries and bank deposits, and unlike a stablecoin, its price is designed to rise over time as it accrues yield.
As of late August 2026, $USDY had roughly $2.14 billion in tokens outstanding, backed by about $2.19 billion in underlying assets, giving it a collateralization ratio of 105.79%, according to Ondo's own transparency dashboard. A rising redemption value instead of a fixed $1.00 peg, separates $USDY from Tether's $USDT, Circle's $USDC, and every other dollar-pegged stablecoin on the market.
How Does $USDY Actually Work?
$USDY is issued by Ondo $USDY LLC as a senior unsecured note. Holding the token means holding a debt claim against a portfolio of assets, not a direct share of a Treasury bill and not a simple dollar substitute. Per Ondo's most recent public disclosure, that portfolio sits in segregated custody, largely at Morgan Stanley, with bank demand deposits at insured US institutions covering same-day redemption needs. An independent auditor reviews the holdings monthly.
As of Ondo's most recent published breakdown (April 2026), the portfolio mix was:
- About 92% short-term US Treasury securities, mostly under six months to maturity
- About 8% bank demand deposits, used to fund redemptions without selling Treasuries early
$USDY launched on Ethereum in August 2023 and has since expanded to Solana, Mantle, Sui, Aptos, and several other networks. As of August 2026, it operates across roughly a dozen blockchains, up from eight earlier in the year, with Solana reported as hosting a large share of the outstanding supply.
Why Doesn't $USDY Hold at $1.00?
A stablecoin is engineered to stay as close to $1.00 as possible. $USDY does the opposite on purpose. It launched at $1.00 and its redemption value climbs as the underlying Treasuries and deposits earn interest. By late August 2026, $USDY had traded well above its launch price, reflecting more than two years of accrued yield.
Ondo also offers a rebasing version called rUSDY, which pays out interest as a growing token balance rather than a rising token price. Both versions track the same underlying portfolio; they just express the yield differently, which matters for how the token behaves inside smart contracts and accounting systems.
Yield That Moves With the Market
$USDY's yield is not fixed. It reflects the weighted average return of the Treasury and deposit portfolio, after fees. Ondo's stated management fee is 0.15% annually, and the company has waived it through January 1, 2027, meaning holders are currently receiving the gross portfolio yield rather than a fee-reduced rate.
Recent data from Ondo's disclosures and third-party trackers put the seven-day annualized yield near 3.49% as of August 2026, down from levels above 4.5% earlier in the year as short-term Treasury yields eased. A conventional stablecoin, by contrast, pays no yield to the holder at all; any interest earned on its reserves stays with the issuer.
Who Can Actually Buy $USDY?
Access is where the gap with stablecoins widens further. $USDT and $USDC are broadly available to almost anyone with a crypto wallet. $USDY is not. It is restricted to eligible non-US persons, and Ondo Global Markets explicitly bars US persons and anyone physically located in the United States from subscribing, redeeming, or acquiring the token. Minting also requires know-your-customer verification.
Ondo's SEC-registered broker-dealer subsidiary, Oasis Pro Markets, secured FINRA authorizations in July 2026 as a step toward eventual US retail access, but as of early September 2026 $USDY remained unavailable to US persons. Nearly all of its growth has come from markets outside the United States.
How Big Has $USDY Grown?
$USDY has become the largest single product in Ondo's lineup by a wide margin. Company and third-party data through mid-2026 show:
- Roughly $2.14 billion to $2.20 billion in $USDY outstanding as of late August 2026
- Approximately $1.4 billion in net $USDY inflows during the first half of 2026 alone
- Distribution across roughly a dozen blockchain networks
- Over 15,000 wallet addresses holding $USDY directly, as of an August 2026 count
- More than 173,000 holders reported across Ondo's yield-bearing products as a whole, as of a separate July 2026 count
That scale puts $USDY ahead of Ondo's other Treasury product, OUSG, which holds a few hundred million dollars in assets but is restricted to qualified purchasers meeting million-dollar-plus investment thresholds. $USDY exists specifically to serve individual, non-US buyers who cannot meet that bar.
$USDY vs. Traditional Stablecoins: The Core Differences
- Price mechanics: $USDY's redemption value rises with accrued yield; stablecoins target a fixed $1.00
- Yield: $USDY passes portfolio returns to holders, minus a fee; most stablecoins pay holders nothing
- Legal structure: $USDY is a secured note claim on a portfolio; $USDT and $USDC are typically framed as redeemable reserve-backed tokens
- Access: $USDY excludes US persons and requires KYC to mint; major stablecoins are far more broadly accessible
- Collateral composition: $USDY holds Treasuries and bank deposits reviewed monthly; stablecoin reserve disclosures vary by issuer
Conclusion
$USDY is built as a yield-bearing note secured by Treasuries and bank deposits, not as a dollar-pegged payment token. Its rising redemption value, portfolio-linked yield near 3.49% as of August 2026, roughly $2.14 billion in outstanding supply, and restriction to non-US buyers together separate it structurally from $USDT, $USDC, and other conventional stablecoins.
- Report by Eco: Ondo $USDY: Tokenized Treasuries Explained
- Report by Allium: Ondo Finance ($ONDO) Valuation Report
- Ondo Finance: $USDY Portfolio Transparency Dashboard
- Report by CoinPaprika: Ondo Finance ($ONDO): Tokenized Treasuries Leader, Full Review
- Report by Tokenized Living: Ondo Finance Review 2026: Tokenized Treasuries, Stocks and Risks
- Report by Eco: OUSG Deep Dive 2026: Ondo's Short Treasury Fund