Stablecoin Yield vs T-Bill Yield: Where the Extra Return Comes From

The two numbers answer different questions

A Treasury bill yield answers a narrow question: what return does the U.S. government pay to borrow for a given short period, on a security held to maturity? A stablecoin yield answers a different one: what will someone pay me to lend this token, or what will a fund pass through after its own charges, and what do I have to accept in exchange?

Both numbers can be right and still not comparable. The work is in the adjustment, not in the subtraction.

What a stablecoin holder can actually earn

Three routes can pay a holder something, and none of them is the token itself.

The token itself. Circle’s USDC Terms are explicit: USDC does not generate any interest or return for holders, and while Circle may hold the reserves in interest-bearing accounts or other yield-generating instruments, the holder is not entitled to those returns. That is the baseline, and every yield figure needs an explanation.

Lending through a venue. An exchange earn product takes the deposit and on-lends it, typically to margin traders and other borrowers on the same platform. On 25 October 2026, the OKX Earn page showed a USDT range of 3.57% to 10.00% and a USDC range of 3.59% to 10.00%, with a separate 10.00% bonus tranche for a flexible product. The page defines APR as the annual percentage rate the deposit generates and disclaims responsibility for losses caused by third-party DeFi platforms. Our guide to OKX Simple Earn and On-Chain Earn covers the product mechanics.

A tokenized Treasury fund. A product such as USYC is described by Circle as a tokenized money market fund that invests in Treasury bills and reverse repurchase agreements. Yield accrues through a rising token price rather than a periodic payment, access starts at $100,000, and subscription and redemption fees are waived on the first $1 million of daily volume. This route passes through bill yield after fund costs, in exchange for a fund structure, eligibility rules and a redemption process.

Lending on a decentralised protocol. From self-custody, the shape is the same as venue lending: a borrower pays, and the depositor carries smart-contract and liquidation risk.

Where the extra return comes from

Above the bill rate, the additional return has to be produced by someone. There are four usual sources.

Borrower demand. Leveraged traders pay to borrow stablecoins because they expect a return from a position that exceeds the borrowing cost. That demand is real, and it is also cyclical: when leverage appetite falls, the rate falls with it. A rate that exists because borrowers are paying it can disappear when they stop.

Platform balance sheet and operations. An exchange can pay a rate from its own revenue, from a promotional budget, or from the spread between what it charges borrowers and what it pays depositors. In each case the depositor is taking exposure to the platform’s solvency and to its willingness and ability to process withdrawals.

Fund structure and fees. A tokenized fund converts bill yield into a token price that rises over time. The gross yield is the bill yield; the net yield is that minus the fund’s fees and operational costs. The advantage is convenience and transferability, not a higher risk-free rate.

Liquidity and term. A product that locks funds for a fixed term, or that can delay redemption, usually pays more than a flexible one. That premium is payment for giving up the option to leave.

Why the headline APY is not free money

The number on the product card is the beginning of the analysis, not the end.

• It may be a range, not a rate. The OKX USDT row on the retrieval date spanned 3.57% to 10.00%. The bottom of that range is the part that looks like a base rate; the top is the part to interrogate.
• It may include a bonus. A separate 10.00% tranche was displayed for a flexible product. A bonus tranche is its own offer with its own term, cap and eligibility rules; read those before treating any part of it as a base rate.
• The platform keeps a share. OKX’s Simple Earn agreement sets its fee on the flexible product at 15% of the returns generated, and says the amount published on the platform can change. Read the product agreement for the percentage rather than assuming the advertised rate is what reaches your balance.
• APR is not APY. APR is a nominal annual rate and does not by itself include compounding. If returns are paid daily and compounded, the effective annual figure is higher than the APR; if they are paid in a token that then falls, the effective figure is lower.
• Principal can be lost. The same OKX agreement states that Simple Earn is not a principal-protected product and that users risk losing principal in whole or in part. A 10% rate on a deposit that is not returned in full is a worse outcome than a 4% bill held to maturity.
• The peg can move. Yield is denominated in the token. If the token trades at $0.95 when you exit, the yield earned in tokens does not cover the loss on the principal.

Reading the T-bill side correctly

The Treasury’s daily bill table publishes two numbers for each maturity, and they are not interchangeable. On 23 October 2026, the 4-week bill showed a 3.94% bank discount rate and a 4.01% coupon-equivalent yield; the 13-week showed 4.04% and 4.14%; the 26-week showed 4.17% and 4.32%.

The discount rate is the convention used to price the bill. TreasuryDirect explains that bills are sold at a discount and pay face value at maturity, with the difference being the interest, and gives the price formula as face value multiplied by one minus the discount rate times time divided by 360. A bill bought at a discount therefore earns its return on a smaller amount than face value, which is why the discount rate understates the return on the money actually invested. The coupon-equivalent figure restates it on that basis.

That distinction matters when someone compares a bill’s discount rate with a stablecoin APR and concludes the gap is small. Use the coupon-equivalent figure, or the gap is overstated before any risk adjustment.

A like-for-like comparison, step by step

1. Match the horizon. A 13-week bill held to maturity is not comparable with a flexible deposit you can withdraw tonight, or with a 90-day locked product you cannot.
2. Use the same convention. Take the bill’s coupon-equivalent figure as a simple annual yield, and put the stablecoin product’s APR on the same basis — or convert both to an effective annual rate if compounding matters to you.
3. Subtract every fee and cap the bonus. Recalculate the stablecoin rate for your actual balance and eligibility, not the advertised top of the range.
4. Add the risk you are taking. Credit risk to borrowers, platform risk on the venue, custody and fund risk on a tokenized product, and depeg risk on the token itself. There is no published expected-loss figure for these; the adjustment is a judgement, and it should be explicit.
5. Check access and minimums. A $100,000 minimum on a tokenized fund, or an eligibility restriction, can remove a route entirely.
6. Check the tax treatment. Interest, fund distributions and trading gains are treated differently across jurisdictions. Confirm your own position rather than assuming the headline yields are after-tax equivalents.

What the comparison can and cannot tell you

It can tell you whether the extra yield is large enough to be worth the extra risk, once both sides are measured on the same basis. It cannot tell you that the extra yield is safe, and it cannot reduce the risk by labeling it a spread.

The honest version of the comparison is a sentence like: this product pays roughly X% more than a bill of the same maturity, net of fees, in exchange for platform credit risk, possible withdrawal delays and token price risk. Whether X is enough is a question about your own capacity to absorb those outcomes, not a fact about the market.

For the mechanics of the underlying security, see our guides to how T-bill auctions work and tokenized Treasuries.

Risk note. This is an explanation of how stablecoin yields and Treasury yields differ, not advice on which to hold. Stablecoin yields are variable, can be reduced or withdrawn by the platform, and are not principal-protected; stablecoins can trade away from one dollar, and redemption can be restricted. Treasury bill yields change, and holding a bill to maturity is not free of reinvestment and inflation risk. Rates quoted here are dated observations and should be re-checked at the source.