Ondo Finance has launched USDY, a yield-bearing stablecoin backed by U.S. Treasuries and bank deposits, on the Stellar network, marking the first product of its kind available to Stellar users.
Summary
- Backed by short-term U.S. Treasuries and bank demand deposits, USDY accrues daily yield while maintaining liquidity, allowing individuals, small businesses, and institutions to earn on their holdings.
- The stablecoin can also be used as collateral in Stellar’s DeFi ecosystem and for more efficient cross-border payments.
Ondo Finance has launched its flagship stablecoin, United States Dollar Yield (USDY), on the Stellar (XLM) network.
With USDY stablecoin now live on Stellar, individuals and small businesses can save in USDY to preserve value while earning yield, without losing liquidity for everyday spending. Institutions can use USDY for treasury management, gaining a safe, interest-bearing asset with 24/7 access.
USDY can also be deployed as collateral for borrowing and lending in Stellar’s DeFi ecosystem. And in cross-border payments, balances that would normally sit idle while awaiting transfer can now earn yield until settlement.
“The global reach of the Stellar ecosystem combined with a yield-bearing asset like USDY levels up what is possible onchain,” said Denelle Dixon, CEO of the Stellar Development Foundation.
USDY is already integrated into Stellar-based apps including LOBSTR, Aquarius, Meru, Soroswap, and Decaf Wallet, making it immediately available for the aforementioned use cases.
Stellar’s stablecoins get a yield upgrade with USDY
According to Ondo Finance, this marks the first time such a product—a stablecoin that automatically accrues yield from U.S. Treasuries and bank deposits—is available on the Stellar network. While Stellar hosts a number of fiat-backed stablecoins like USD Coin (USDC) and EURC (EURC), those tokens maintain a fixed value but do not generate yield.
Other tokenized assets on Stellar, such as Etherfuse’s Stablebonds, provide returns tied to treasuries, but they function more like bond instruments rather than stablecoins integrated into payments and DeFi.
“Stablecoins unlocked global access to the U.S. dollar. With USDY, we’re taking the next step by bringing U.S. Treasuries onchain in a form that combines stability, liquidity, and yield,” said Ian De Bode, Chief Strategy Officer at Ondo Finance.