USYC (US Yield Coin) is an on-chain representation of Hashnote's Short Duration Yield Fund (SDYF) that invests in short-term US Treasury Bills and performs repo/reverse-repo activities. It provides investors with short-term risk-free rate returns while leveraging blockchain technology for transaction speed, transparency, and composability. ^[6]

Overview

USYC (US Yield Coin) is the tokenized representation of Hashnote’s Short Duration Yield Fund (SDYF), which invests in short-term U.S. Treasury Bills and engages in repo and reverse-repo transactions. The token provides returns based on short-term risk-free rates while leveraging blockchain for transaction efficiency and transparency. Investors can mint or redeem USYC on the same day (T+0) or the next (T+1) in USDC or PYUSD, with an automated smart contract system for self-service transactions. Hashnote Management LLC operates under CFTC and NFA regulations in the U.S., while the Cayman Islands Monetary Authority (CIMA) regulates its offshore fund. The platform maintains transparency through regular asset and token price disclosures via an Oracle feed, with all fees clearly stated, and security ensured through segregated custodial accounts and external audits. ^[1]

Structure

Investor Onboarding

Investors can obtain USYC by onboarding to an eligible Hashnote fund. U.S. investors must qualify as Qualified Eligible Participants (QEP) under CFTC regulations to access the Hashnote Feeder Fund, while international investors can onboard through the Hashnote Short Duration Yield Fund (SDYF), a Cayman Islands Monetary Authority (CIMA)-regulated mutual fund. USYC tokens represent fund shares, requiring all holders to complete KYC/AML verification. The fund administrator updates the SDYF share registry to reflect USYC token transactions. ^{[3] [4]}

Subscription Workflow

Investors who complete onboarding to an eligible Hashnote Fund have their wallet addresses added to an allowlist, granting permission to hold USYC. They can subscribe by transferring fiat (USD) or stablecoins (USDC, USDT, PYUSD) through the Smart Contract Teller, after which Hashnote allocates the funds to its Prime Brokerage for investment in T-Bills and repo/reverse-repo agreements. Ownership is recorded on-chain via a permissioned ERC-20 smart contract, with USYC tokens minted to the investor’s wallet in proportion to their fund shares. The number of USYC tokens received corresponds to the deposit amount divided by the current USYC price. ^[2]

Redemption Workflow

Approved wallets on the allowlist can redeem USYC by burning the tokens through the Smart Contract Teller in exchange for fiat (USD) or stablecoins (USDC, USDT, PYUSD). The fund administrator updates the registry to reflect the burned tokens, and Hashnote either transfers stablecoins or initiates the process of retrieving fiat funds for the client. ^[2]

Entitlements

USYC transactions are controlled through an entitlements system that assigns roles to wallets of verified entities, determining their ability to hold and transfer the token. Smart contracts verify these permissions before processing transactions and also conduct OFAC sanctions checks using an on-chain oracle maintained by Chainalysis. The entitlements contract can halt all transactions if suspicious activity is detected, preventing further transfers until the issue is resolved. ^[2]

Smart Contract Teller

The Smart Contract Teller enables on-chain transactions for subscribing to and redeeming USYC. Investors can mint USYC using USDC or PYUSD during market hours, with after-hours transactions processed at the next business day's rate. Redemptions are available at any time based on the latest reported price, with liquidity managed through frequent asset rebalancing. ^[2]