According to Circle’s Chief Business Officer, Kash Razzaghi, the importance of USYC also lies in its appeal to institutional traders as a source of collateral. Many of these traders currently post money market securities as collateral when they want to trade on crypto platforms like Binance. While this arrangement works well for purposes of trading, it is also cumbersome because it can take a day or more to settle a transaction—especially on weekends when the traditional financial system, which unlike crypto does not run 24/7, is closed.
This is not the case when traders post USYC, Razzahi explained, since the collateral can be instantly redeemed for its companion stablecoin USDC, which is fast becoming a practical alternative to traditional dollars.
Chen added that Binance has sought to address this concern with an offering called Banking Triparty that involves the company working with traditional banks to let them act as custodians, and post assets held at the bank as collateral for crypto trading. She added that many of these same partners are working with Binance on integrating USYC, which would provide for faster settlement.
On Thursday, Binance also announced that it would likewise be integrating cUSDO, another yield-bearing stablecoin. cUSDO, which stands for OpenEden OpenDollar, is issued by OpenEden Digital, a Bermuda-licensed and regulated entity.
