Circle is best known for its USDC stablecoin. However, less known is that Circle also owns the fastest-growing tokenized fund on the market: USYC. USYC is a tokenized money market fund, similar to BlackRock's BUIDL and Franklin Templeton's BENJI. Originally launched by Hashnote in 2024 and acquired by Circle in January 2025, it currently boasts over $1.3 billion in assets, making it the world's second-largest tokenized money market fund. USYC invests in reverse repurchase agreements of US Treasury bonds and short-term government securities—almost identical to USDC's reserve investments. The difference lies in that USDC retains its profits, while USYC distributes them to users. USYC's price is not pegged to $1; instead, it automatically accumulates returns as the token price rises. Currently valued at approximately $1.11, its annualized return is around 4-5%. Why did Circle create USYC? First, to circumvent the Genius Act. The Genius Act prohibits stablecoin issuers from paying interest to holders. USDC cannot generate interest, which is a legal red line. However, USYC is an independent fund product, not a payment stablecoin, and is not subject to the Genius Act regulations. Second, it solves the "liquidity vs. yield" dilemma. Traditional logic: holding cash yields no returns, while investments offer returns but lack liquidity. USYC breaks this dilemma—funds continuously earn interest, and can be redeemed almost instantly into USDC when needed. Third, it defends against future competition. Currently, there are countless interest-earning stablecoins. If stablecoins grow tenfold in the next five years, and more and more wealth goes on-chain, the demand for interest-earning stablecoins will explode. If Circle doesn't do it itself, users will use their USDC to mint competitors like Ethena and Ondo, thus leaving the Circle ecosystem. Rather than letting others compete, it's better to do it itself. When users stake USDC and mint USYC, the interest-earning action remains within the Circle system. If we use WeChat as an analogy, the money in your WeChat Wallet is like USDC. When you transfer money to Yu'ebao (Alipay's money market fund), it corresponds to transferring USDC to USYC. Circle uses two products to cover "payment" and "interest-earning," forming a closed loop, so users don't need to leave the platform. USYC's profit model is similar to traditional money market funds, charging an annualized management fee based on assets under management (AUM). In the Q3 2025 financial report, USYC was listed under "Other Income" ($29M) and not disclosed separately, but its growth is rapid; according to Artemis, supply increased by 20% in the most recent month. Currently, USYC's strategic significance far outweighs its short-term revenue. It allows Circle to complete its "payment + savings" product loop within a compliant framework, securing a competitive position in the future interest-bearing stablecoin market.