Ondo OUSG vs USDY: What You Own in a Tokenized T-Bill

Ondo Finance’s tokenized Treasury products are not all the same thing. OUSG gives qualified investors an interest in a fund. USDY is a note, meaning a debt owed by an Ondo company. The ONDO coin traded on exchanges is a governance token that pays no Treasury yield, according to a Bullrunners video hosted by George Lee.

The difference matters because it decides what happens to your money if something goes wrong. A share in a fund, a promise from a company and a voting token carry very different rights. The video explains what a T-bill is and how Ondo put one on-chain. It also covers the risks that rarely make the headline.

What is a Treasury bill?

A Treasury bill, or T-bill, is short-term US government debt that matures in anywhere from 4 weeks to 1 year. The video quotes NerdWallet’s simple version: you buy the bill at a discount, and when it matures you receive its full face value. The gap between the two is your interest.

In practice, you pay a bit less than $100 and some weeks later get $100 back. Because the borrower is the US government, T-bills are treated as about as safe as money gets in traditional finance.

Why did tokenized Treasuries appear?

Tokenized Treasuries appeared because stablecoin holders were earning nothing while T-bills paid around 5%. For years that gap didn’t matter much, because rates were close to zero. The video explains that America’s central bank started raising rates in March 2022. By the middle of 2023, short-dated Treasuries were paying around 5%.

Meanwhile, well over $100 billion sat in stablecoins, earning holders nothing. The companies behind those coins park their reserves in short-dated government debt and keep the interest. That gap is the market Ondo went after.

US law points the same way. The GENIUS Act, signed in July 2025, bars payment stablecoin issuers from paying holders interest or yield just for holding their coins. If you want Treasury yield on-chain, you need a different kind of token.

Ondo’s founder, Nathan Allman, described the pitch in a 2025 interview shown in the video. He said tokenized Treasuries let investors move value 24/7, globally and peer-to-peer, while earning yield. Ondo offers round-the-clock conversion between stablecoins and tokenized Treasuries. He added that yield matters less for coins held briefly as payments. It matters much more when they are used as a long-term store of value or as collateral, especially by institutions.

In that interview he referred to a May 2025 test with JPMorgan’s blockchain unit, Kinexys, and Chainlink. An investor used what he called tokenized bank deposits from JPMorgan to buy into Ondo’s Treasury fund, with no stablecoin involved. The video stresses it was a test, not a live service.

Who is Ondo Finance?

Ondo Finance was founded in 2021 by Nathan Allman and Pinku Surana, who had both worked at Goldman Sachs. Its first product was a set of DeFi vaults that split returns into a safer slice and a riskier slice.

The turn came in January 2023, when Ondo launched tokenized funds. The lead fund held US government debt and was aimed at stablecoin holders. According to the video, the minimum at launch was $100,000, and Ondo said openly this was for regulatory reasons. The video says that detail shows who the product was built for.

Ian De Bode, then Ondo’s president, said stablecoins had clear product-market fit but weak investor protections and no yield. Tokenizing Treasuries offered both better protections and yield paid daily. According to the video, Ondo announced in May 2026 that Nathan Allman had died unexpectedly. Ian De Bode, who the video says had run strategy and day-to-day operations, took over as chief executive.

OUSG vs USDY: what is the difference?

OUSG is a tokenized fund interest, while USDY is a bearer note from an Ondo company. On a price chart they can look similar. Legally, they are not.

OUSG gives holders an interest in a fund. According to the video, that fund holds short-term Treasury funds run by managers such as BlackRock, Franklin Templeton, WisdomTree and Fidelity, plus some cash for quick redemptions. Fund holdings change over time, so check Ondo’s current list. OUSG is only for large qualified investors who pass checks. It runs on an allow list: every transfer checks whether the receiving address is approved, and if it is not, the transfer is cancelled. When BlackRock launched its own tokenized Treasury fund, BUIDL, in March 2024, Ondo moved $95 million of OUSG’s money into it in the first week. One tokenized fund ended up holding another.

USDY, launched in August 2023, works differently. Ian De Bode described it as a permissionless bearer instrument. A bearer instrument means whoever holds it owns it, like cash in your pocket. After certain compliance periods, holders can send it to a Web3 wallet or to an exchange that supports it, and it still pays yield daily. But USDY is a note. Holders are owed the value of the note, not the Treasuries themselves. It can only be bought directly from Ondo by people who pass checks and are not US persons.

To protect note holders, Ondo named an independent collateral agent at launch. The video says the agent checks the backing every day and can, if needed, take control on behalf of note holders. An Ondo executive acknowledged in the video that wrapping a security in a new structure can add structural, operational, legal and counterparty risks.

Product	What you hold	Who can hold it	How it moves
OUSG	Interest in a fund	Large qualified investors who pass checks	Only between Ondo-approved wallets
USDY	A note (debt from an Ondo company)	Non-US persons who pass checks (direct purchase)	Freely after compliance periods
ONDO coin	Governance token	Sold on exchanges; check local rules	Traded on exchanges

Does the ONDO token earn Treasury yield?

No. The ONDO coin you can buy on an exchange is a governance token. Holders can vote on things like upgrades and settings, but owning it gives no claim on the yield from OUSG or USDY. The video says plenty of people mix the two up. That is not a defect in the token. It is simply a different product.

Where does the yield come from?

The yield comes from the Treasuries and cash held by the fund or note. The US government pays interest, the issuer takes its fees, and the rest goes to holders. With USDY, the yield shows up as the token price creeping up over time rather than as extra coins. With OUSG, each token’s value tracks the fund’s value.

That leads to one simple rule. When interest rates fall, the yield falls with them. A tokenized Treasury cannot pay more than the Treasuries underneath it, minus costs. If something on-chain promises far more than T-bills pay, the extra is coming from somewhere else, usually more risk.

The market has grown. According to the video, the data site rwa.xyz counted roughly $14.7 billion in tokenized Treasury products in late September 2026, with USDY among the largest. The video says Ondo reports more than a million wallets have touched its assets, a figure that also covers its tokenized stocks and funds. Ian De Bode described Ondo’s model as wrapping traditional assets so they can be issued offshore in a format that looks more like a stablecoin. The video points to the word offshore as the trade-off. The easy, stablecoin-style version exists because it is sold outside the US under different rules.

What are the risks of tokenized Treasuries?

The video lists four risks that the marketing does not lead with:

1. A chain of companies. You rely on the issuer, the fund managers, the custodian holding the real assets and the collateral agent. If any link breaks, the token is only as good as the legal paperwork behind it.
2. Speed mismatch. The Bank for International Settlements warned in November 2025 about liquidity risk in tokenized money market funds. The video says tokenized funds can make that risk worse than in ordinary funds. Tokens move around the clock, but the assets behind them cannot always be sold that fast.
3. Exchange prices are not guaranteed. If you sell a yield token to another trader instead of redeeming it with the issuer, you may get less than it is worth, especially in stressed markets.
4. Access limits. Some products are closed to Americans, and others are only for wealthy or professional investors.

BlackRock’s Samara Cohen spoke with Ian De Bode in a clip shown in the video. She noted that some models are permissioned and some permissionless, and some are securities while others are derivatives. She questioned whether they can all coexist without fragmenting liquidity or undermining transparency. IOSCO, the global body for securities regulators, said in November 2025 that tokenization brings familiar risks in new forms. It also said the same activity should face the same rules.

A three-question check before holding a yield token

The video’s core point is that the word Treasury on the label is the start of your homework, not the end. Before holding any token that promises Treasury yield:

1. Find the document that says who owes you the money and what exactly they owe. A share in a fund and a note from a company are very different promises. Read the issuer’s documents, not social media posts.
2. Check whether you can hand it back. How fast can you redeem, and does your country even qualify?
3. Confirm it is the yield product. Make sure you are not holding a governance coin with a similar name.

What to watch next

Watch where short-term US interest rates go, since tokenized Treasury yields move with them. Watch whether regulators act on IOSCO’s same-activity, same-rules principle. Watch whether pilots like the Kinexys test become live services. And if you hold an Ondo token today, check which of the two yield products you own, or whether you hold the ONDO governance coin instead.