Highlights:

  • As part of investments in short-term U.S. Treasury Bills, Hashnote’s USYC tokens offer a yield, the company claims.
  • Due to its acquisition of Hashnote, Circle is now better positioned to compete with other stablecoin issuers, including Tether Ltd., which has a market capitalization of around USD 138 billion, making it the largest stablecoin issuer.

Circle Internet Group Inc. acquired Hashnote Management LLC, a provider of tokenized capital market fund with close to USD 1.3 billion in assets. Circle is the issuer of the USD 48 billion USD Coin stablecoin.

Circle stated that as part of the agreement, USDC will be integrated with Hashnote’s US Yield Coin, enabling investors to store the asset and earn yield-bearing interest. According to the company, its goal is to make it simple for consumers to switch between the two asset types.

Cryptocurrencies that are “pegged” to a certain traditional currency, like the US dollar, so that they trade one-for-one are known as stablecoins, like USDC. In this manner, one USDC will always be worth USD one.

Circle Chief Executive Jeremy Allaire said the collaboration of USYC and Hashnote would be a “major moment for the evolution of the stablecoin market,” as participants growingly anticipate the market to be similar to traditional finance. “We helped invent tokenized cash and are now leading the way in tokenized money markets, both of which we believe will become essential to the future of the global financial system,” he said.

Tokenization is the process by which an underlying asset is represented as digital tokens kept on a blockchain in the crypto asset market. Tokens, which might be digital, physical, fungible, or nonfungible assets, function similarly to digital certificates of ownership in these situations. They may consist of money market funds, equities, bonds, and other securities.

As part of investments in short-term U.S. Treasury Bills, Hashnote’s USYC tokens offer a yield, the company claims.

Tokenization, which allows traditional assets to be transformed into digital assets, has become a major trend in the cryptocurrency sector. Market research firm McKinsey & Company predicts that by 2030, the total market value of tokenized assets under management could reach USD two trillion.

Investors can easily shift their money in and out of the market as stablecoins lack the volatility of other cryptocurrency assets such as Bitcoin or Ethereum. This makes the creation and distribution of the tokens crucial to the industry’s expansion.

Due to its acquisition of Hashnote, Circle is now better positioned to compete with other stablecoin issuers, including Tether Ltd., which has a market capitalization of around USD 138 billion, making it the largest stablecoin issuer. Recently, Tether unveiled Hadron, a tokenization platform that makes it easier to convert equities, bonds, and commodities into digital tokens.

The deal’s financial details are not made public yet.

Circle also announced that it is partnering with DRW Holdings, a high-speed trading behemoth that supported Hashnote through its institutional crypto trading subsidiary Cumberland, in a strategic collaboration. Cumberland will offer USDC and USYC settlement capabilities as part of the cooperation.