Low risk — backed by US Treasuries with institutional custody, but off-chain dependencies and regulatory uncertainty add modest counterparty risk
Top Risks
1
USYC is a permissioned, KYC-gated token representing the Hashnote International Short Duration Yield Fund. Regulatory changes to tokenized securities could force redemption freezes or operational changes, with $1.7B in assets at risk.
2
As an accumulating yield token backed by short-duration US Treasuries, USYC depends on the custodial chain from Hashnote to the fund administrator. Any break in this off-chain custody chain (bankruptcy, fraud, operational failure) could impair redemption.
3
Growing DeFi integration as collateral (margin trading, lending) creates rehypothecation risk where a USYC depeg event could cascade through protocols using it as margin collateral.
Risk Breakdown
Frequently Asked Questions
Is Circle USYC safe to use?
Circle USYC receives a B- risk grade (29/100) from Hindenrank, where lower scores indicate lower risk. Low risk — backed by US Treasuries with institutional custody, but off-chain dependencies and regulatory uncertainty add modest counterparty risk Circle USYC is a tokenized US Treasury money market fund that lets you earn approximately 4.7% yield on-chain. It represents the Hashnote International Short Duration Yield Fund, investing in short-term T-bills and reverse repos. With $1.7B in assets, USYC is one of the two largest tokenized Treasury products alongside BlackRock's BUIDL. Its A- risk grade reflects the ultra-safe underlying assets (US government securities) and clean operational track record, with risk primarily coming from the off-chain custody chain and regulatory uncertainty around tokenized securities.
What are the main risks of using Circle USYC?
The key risks identified for Circle USYC are: (1) USYC depends on an off-chain custody chain (Hashnote fund administrator, regulated custodian) that cannot be verified on-chain. Unlike native DeFi protocols, you must trust the institutional infrastructure behind the token. (2) Regulatory changes to tokenized securities could restrict USYC's DeFi integrations or force operational changes. The tokenized fund regulatory landscape is still evolving. (3) Growing use of USYC as DeFi collateral means any redemption delay could cascade into margin calls across multiple protocols, amplifying a localized problem.
What is Circle USYC's risk score breakdown?
Circle USYC scores 29/100 across eight risk dimensions: Mechanism Novelty: 2/15, Interaction Severity: 2/20, Oracle Surface: 1/10, Documentation Gaps: 1/10, Track Record: 3/15, Scale Exposure: 7/10, Regulatory Risk: 8/10, Vitality Risk: 5/10. The highest risk area is Regulatory Risk at 8/10.
How does Circle USYC compare to other RWA protocols?
Among 72 rated RWA protocols on Hindenrank, Circle USYC ranks #7 by safety (lowest risk score = safest). Its 29/100 risk score and B- grade place it among the safer RWA protocols.
Has Circle USYC ever been hacked or exploited?
Circle USYC scores 3/15 on the Track Record risk dimension, indicating some history of security incidents or exploits. Higher scores reflect more severe or frequent incidents. Review the full risk report for details.