[PureParadigm]

The Password Store app delegates key management to another app. I use OpenKeychain [1] for this. I believe OpenKeychain supports Yubikeys, but I haven't used that feature myself so I can't speak about how well it works.

[1] https://www.openkeychain.org/

[GekkePrutser]

It works perfectly both over NFC and USB either OTG micro USB or USB-C.

I only use hardware keys now.