Roughly $200 billion of stablecoin supply sits collateralized by short-term US Treasuries. Roughly $9 billion of tokenized treasury fund AUM sits in the same paper. USDC’s reserves and USDY’s pool are not different underlying assets. They are the same T-bills, custodied by the same banks, earning the same coupon.
The category divide that separates them on this map, on industry dashboards, in regulator filings, and in marketing is a regulatory artifact. Economically, both pools are tokenized wrappers on US sovereign debt. The only meaningful difference is where the yield goes: stablecoins keep it, treasury tokens distribute it.
That divide is now breaking. Circle owns both sides of it. BlackRock just filed a fund explicitly designed to sit at the boundary. The GENIUS Act treats them as the same kind of asset for reserve eligibility. The labels are still there, but the underlying economic reality is converging fast.
USDC’s reserves are tokenized treasuries
Circle holds $76B in T-bills, repo, and cash. The label on the wrapper is the only thing that makes it a stablecoin and not a treasury fund.
Open a recent Circle reserves attestation. The composition is roughly 80% short-duration US Treasury bills (held directly or via the Circle Reserve Fund, a SEC-registered government money market fund managed by BlackRock), 10% overnight repo collateralized by Treasuries, and 10% cash deposits at globally systemically important banks.
That portfolio composition is identical, line item for line item, to what a tokenized money market fund holds. The Circle Reserve Fund itself is registered with the SEC as a money market fund. The only difference between a USDC holder and a Circle Reserve Fund holder is which wrapper they hold.
The USDC wrapper distributes none of the yield to holders. The ~4 to 5% the underlying T-bills generate goes to Circle, which uses some of it to pay distribution incentives (the Coinbase revenue share, the Binance partnership, the issuer-side marketing budget) and keeps the rest as operating income. The wrapper exists so that the holder gets a stable $1.00 unit they can use in payments, while Circle internalizes the carry trade.
Strip the marketing and a stablecoin is a tokenized treasury fund where the issuer keeps the yield in exchange for guaranteeing the unit at $1.00. The treasury exposure is the same.
Tether tells the same story at larger scale. USDT’s $185 billion supply is roughly 80% backed by T-bills and repo according to the firm’s own attestations. The yield on that book runs into the billions annually and is captured entirely by Tether. The mechanism is identical to USDC’s, just at twice the size.
USDY and BUIDL are stablecoins, just under a different label
Same Treasury collateral, same custodians, same yields. The only structural difference is that the yield flows through to holders.
Walk through USDY’s prospectus. Ondo describes the product as a "yield-bearing stablecoin alternative." The underlying is short-duration US Treasuries plus repo, custodied by Morgan Stanley and StoneX, available on Ethereum, Solana, Arbitrum, Mantle, Sui, and Aptos. Minimum investment is $500. Holders accrue yield daily and the unit rebases.
Open BUIDL’s filing. BlackRock describes the product as an "onchain money market fund." The underlying is short-duration US Treasuries plus repo, custodied by BNY Mellon, available on Ethereum, Solana, BNB Chain, Avalanche, Optimism, Arbitrum, Aptos, and Polygon. Minimum investment is $5M. Holders accrue yield daily and the unit rebases.
Both products use stablecoins (USDC primarily) as the subscription and redemption rail. Both are designed to be held in crypto-native wallets. Both pass yield through to the holder rather than retaining it at the issuer. The labels diverge. The underlying collateral does not.
The same is true of Circle’s USYC, which it acquired in 2025. USYC is described as a tokenized money market fund, sits at roughly $2.4B AUM, and is the largest individual tokenized treasury product after BUIDL. Its underlying is identical to what backs Circle’s USDC. The same firm holds both pools of T-bills, distinguished only by which side of the wrapper the yield flows toward.
The economic reality, in one chart
Combined treasury exposure across stablecoins and tokenized treasury funds, sized by issuer.
The "tokenized treasuries" category that gets reported as roughly $9B is the visible tip of the iceberg. Add the stablecoin wrappers and the real tokenized exposure to short US Treasuries is closer to $230B. The category boundary makes the smaller number look bigger and the bigger number look like something else.
Why the boundary exists
The divide is regulatory, not economic. Stablecoins and money market funds sit under different SEC rules, different state-level licenses, different international frameworks.
The reason the two pools get classified separately is that their issuers operate under different rule sets.
A money market fund (which is what BUIDL, USYC, USDY, and BENJI all are, structurally) registers with the SEC under Rule 2a-7 of the Investment Company Act of 1940. The rules govern portfolio composition, valuation methodology, redemption gates, and disclosure cadence. The fund passes yield through to holders, charges a management fee, and is treated for tax purposes as a security.
A payment stablecoin sits under a different stack. Before 2025, it sat under state money-transmission laws and the Treasury’s BSA framework. After the GENIUS Act, it sits under a new federal stablecoin regime with explicit reserve eligibility rules. The stablecoin keeps the yield by regulatory convention, distributes face-value units, and is treated for tax purposes as a payment instrument.
The two regimes were drafted decades apart for different reasons. They produced products that, in 2026, hold the same underlying paper but live under different acronyms.
Circle owns both sides of the boundary
A single firm runs USDC and USYC. The acquisition tells you the boundary is internally inconsistent.
In late 2024, Circle acquired Hashnote and inherited USYC, which by January 2026 had grown to overtake BUIDL as the largest tokenized treasury product by AUM. Circle now operates a stablecoin (USDC, ~$76B) and a tokenized money market fund (USYC, ~$2.4B) simultaneously.
From a customer-acquisition standpoint, the two products are substitutable. A crypto-native institution that wants to hold dollar-denominated, T-bill-backed exposure on a chain can choose either. From Circle’s perspective, the choice between them is a yield-distribution preference: hold USDC and Circle keeps the carry, hold USYC and the customer keeps it (minus the management fee). The underlying collateral is the same.
The acquisition revealed that the labels were always operationally orthogonal to the asset. Circle did not have to build a new collateral pool to issue USYC. It bought a wrapper that, beneath the label, was already holding what USDC was holding.
GENIUS Act formalizes the merger
The new federal stablecoin regime treats tokenized treasuries as the canonical reserve asset. BRSRV is the first product built to that specification.
The GENIUS Act, signed in November 2025, set explicit reserve eligibility rules for federally licensed payment stablecoin issuers. The eligible asset list runs short: cash, insured bank deposits, short-term US Treasuries, repo collateralized by Treasuries, and "tokenized equivalents of the foregoing that meet specified custody and segregation requirements."
That last clause is the explicit bridge. A stablecoin issuer under GENIUS can hold its reserves directly in tokenized treasury funds. Treasury exposure that previously had to be custodied conventionally can now be held in an onchain wrapper that itself is a tokenized money market fund.
BRSRV, the BlackRock product filed in May 2026, was built to exactly this specification. Its 485APOS uses the phrase "eligible reserve assets for payment stablecoin issuers under the GENIUS Act" verbatim. The product exists to be held by stablecoin issuers as their on-chain reserve. The two categories are no longer parallel rails. One is now the explicit reserve asset for the other.
What collapses if the boundary goes
A few categorizations become unstable. The total addressable market figures most analysts publish are about to look wrong.
Three immediate consequences if the regulatory category collapses into the economic one.
First, the "tokenized RWA market" figure expands by an order of magnitude. The widely cited $31B tokenized RWA market in May 2026 excludes stablecoin supply on the theory that stablecoins are payment instruments, not tokenized assets. If stablecoins are reclassified as tokenized treasuries (which is what they are economically), the figure jumps to ~$250B and the field looks dramatically more mature.
Second, market-share rankings flip. Circle’s USDC plus USYC at ~$78B combined dwarfs BlackRock’s BUIDL plus BSTBL plus BRSRV at a combined ~$8B once they hit scale. The "BlackRock leads tokenization" narrative survives only as long as the category excludes stablecoins.
Third, regulatory arbitrage opportunities narrow. If a stablecoin and a tokenized money market fund are treated as substitutable reserve assets, then the carry trade that stablecoin issuers run becomes harder to defend against treasury-fund products that pay yield through to holders. The existing $200B+ stablecoin float looks more like temporary rents than a structural margin.
None of those consequences land in 2026. They land slowly, as the GENIUS Act enforcement guidance arrives, as the next wave of stablecoin licenses gets issued, and as the first stablecoin issuer files reserves held in BRSRV or its equivalent. The boundary is breaking on a multi-year timeline. The map will reflect the shift as it happens.