Circle's USYC Tokenized Fund Surpasses $1.3B, Narrows Gap with BlackRock's BUIDL After $694M Outflow

Circle's tokenized money market fund, USYC, has experienced explosive growth, surpassing $1.3 billion in assets under management (AUM) and becoming the second-largest fund in its category. According to data from rwa.xyz, USYC's AUM reached $1.34 billion as of December 11, marking a more than fivefold increase from $242 million in July. This rapid ascent has positioned it just behind BlackRock's BUIDL fund, with the gap narrowing to less than $500 million.

The surge in USYC's assets coincides with significant outflows from the market leader. BlackRock's BUIDL fund shed approximately $694 million over the past 30 days, largely due to redemptions from a handful of institutional users. During the same period, USYC added $337 million. Analysis suggests BUIDL's outflows are part of a broader, tactical pattern linked to its use as trading collateral during market stress and portfolio rebalancing, rather than credit concerns specific to the fund.

A key driver of USYC's growth is its strategic partnership with Binance, announced on July 24. The collaboration enabled Binance's institutional clients to hold USYC and use it as off-exchange collateral for derivatives trades, with assets custodied through Binance Banking Triparty or its institutional partner, Ceffu. Furthermore, the fund was issued on BNB Chain, facilitating seamless access to tokenized traditional assets. As of December 11, approximately $1.22 billion of USYC's AUM resided on BNB Chain, reflecting deep integration with Binance's institutional infrastructure.

Circle executives highlighted the fund's design for modern markets. Kash Razzaghi, Circle's Chief Business Officer, noted that USYC's near-instant redemption into USDC makes it suitable for collateral use. Catherine Chen, Head of Binance VIP & Institutional, stated the integration represents a step forward for the future of capital markets.

The divergent flows between USYC and BUIDL underscore how distribution partnerships and blockchain positioning critically affect adoption. Circle's focused strategy on BNB Chain via Binance has provided a distinct competitive advantage in capturing institutional demand for yield-bearing collateral, propelling USYC past competitors like Franklin Templeton's BENJI and Ondo's OUSG in the rankings. This shift marks a significant change in the competitive landscape for tokenized Treasury products, which have seen demand nearly double since the start of 2025.