How is Ondo Finance’s USDY Different From a Stablecoin?

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?

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.

Resources

1. Report by Eco: Ondo USDY: Tokenized Treasuries Explained
2. Report by Allium: Ondo Finance (ONDO) Valuation Report
3. Ondo Finance: USDY Portfolio Transparency Dashboard
4. Report by CoinPaprika: Ondo Finance (ONDO): Tokenized Treasuries Leader, Full Review
5. Report by Tokenized Living: Ondo Finance Review 2026: Tokenized Treasuries, Stocks and Risks
6. Report by Eco: OUSG Deep Dive 2026: Ondo's Short Treasury Fund