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    HomeBlockchainAnalyzesCircle enters the tokenization space.

    Circle enters the tokenization space.

    • Cryptocurrency firm Circle has acquired Hashnote, the issuer of USYC's $1.3bn tokenised money market fund, in a push for yield-bearing collateral.
    • The acquisition highlights the close relationship between two of the hottest cryptocurrency adoption trends: stablecoins and tokenization.
    • Circle also reached a deal with Cumberland DRW to facilitate liquidity and settlement for USDC and USYC and said it would bring USDC to the institution-focused Canton Network.

    Circle, the cryptocurrency company behind the $48 billion USDC slabecoin, said on Tuesday it has acquired tokenized real-world asset (RWA) issuer Hashnote.

    The companies closed the deal this morning, a Circle spokesperson told CoinDesk and was announced in Davos, Switzerland during the World Economic Forum's annual meeting. The companies did not disclose pricing details.

    Circle aims to integrate USYC with USDC, Circle's flagship stablecoin, enabling convertibility between cash and yield collateral on the blockchain, the press release said. Hashnote issued the $1.3 billion USYC token, which saw massive growth last year to become the largest U.S. tokenized. The Treasury Department market, according to rwa.xyz data,

    Circle's CEO, Jeremy Allaire, said this is a significant step towards aligning traditional financial structures with the speed and transparency of blockchain-based markets.

    "This is a huge unlocking for a market that is increasingly driven by institutional adoption and where participants increasingly expect market structures that are common in TradFi," Allaire said.

    Round shared plans a year ago to go public, and the crypto industry widely expects a public stock offering to happen later this year.

    Tokenisation and stable coins

    The acquisition highlights the interplay between two of the hottest trends in crypto: stablecoins and tokenization. Circle Tether's main stablecoin competitor launched a tokenisation platform last year.

    Stable coins, $200 billion cryptocurrency assets with prices pegged primarily to the US dollar, are a crucial piece of infrastructure in tokenization efforts. They are used as a bridge between fiat money and digital assets and are widely used to settle transactions on blockchain rails.

    Tokenized RWAs such as treasury accounts and money market funds are quickly gaining traction among sophisticated investors and asset managers as collateral for trading. Unlike traditional markets, blockchain-based assets promise transparency, accessibility and round-the-clock settlements. Treasury-backed tokens also allow investors to earn returns while posted as collateral or margin for trades, boosting returns compared to trades backed by fiat money or stablecoins.

    For example, Singapore-based hedge fund QCP Capital earlier in January Implemented bitcoin (BTC)-based trading using BUIDL, the money market fund token issued by BlackRock and Securitize.

    USDC of Canton

    Circle also announced it struck a deal with Cumberland, a DRW-related cryptocurrency and marketplace producer, to provide liquidity and facilitate settlement for USDC and USYC. The partnership aims to expand USYC as a form of collateral on exchanges and custody platforms.

    Additionally, Circle has laid out plans to deploy USDC on the Canton Network, a blockchain used by traditional financial institutions for real-world asset transactions. Integration with Canton would allow for constant liquidity between cash and collateral and enable seamless transfers between decentralized and traditional markets.

    ➡️ https://www.coindesk.com/business/2025/01/21/circle-enters-tokenization-race-by-acquiring-hashnote-usd1-3b-real-world-asset-issuer

    The company acquired the RWA Hashnote platform and the issuer of the world's largest tokenized money market fund, US Yield Coin (USYC). Circle has also partnered with DRW through Cumberland to accelerate adoption of USDC and USYC.

    The strategic acquisition accelerates Circle's product offering and competitive position in digital asset markets; as the world's largest tokenized money market fund (TMMF), US Yield Coin (USYC) will play a critical role as collateral in digital asset markets; DRW's partnership through Cumberland brings one of the world's largest liquidity providers to support the adoption of USDC and USYC. 

    Circle is also announcing planned USDC support on the Canton Network, enabling private transactions and use of USDC and USYC in TradFi markets.

    DAVOS, SWITZERLAND; NEW YORK - January 21, 2025 - Today, Circle Internet Group, Inc. a global financial technology company and leader in the stablecoin market, announced the acquisition of Hashnote - the USYC issuer incubated by Cumberland Labs - which third-party analysts say is the world's largest tokenized treasury and money market fund, RWA.xyz, with a $1.52B implemented at USYC as of January 15, 2025.

    Circle intends to fully integrate USYC with USDC, offering seamless access between TMMF and USDC collateral, one of the world's most popular stablecoins. This will enable USYC to become the preferred form of yield collateral on crypto exchanges and also with custodians and prime brokers.

    "The integration of USYC and Hashnote into Circle's platform marks a major milestone in the evolution of the stablecoin market, as cash and lucrative short-term treasury assets become fungible and convertible at the speed of blockchain and cryptocurrency capital. This is a huge unlock for a market that is increasingly driven by institutional acceptance and where participants increasingly expect market structures that are common in TradFi," said Jeremy Allaire, CEO and Chairman of Circle"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. Circle's acquisition of Hashnote and our strategic partnership with DRW affiliate Cumberland are critical to driving and delivering these products at scale. " 

    "Hashnote's inception is rooted in the recognition of the fundamental role blockchain-based, transparency and settlement will play in future financial transactions," Leo Mizuhara, CEO and founder of Hashnote. "The Joinder Round increases our ability to rapidly scale adoption by pairing USDC, a widely used, liquid payments and stable trading facility, with USYC, a safe, tokenized money market collateral fund with yield. " 

    The deal is backed by a strategic partnership with DRW, one of the largest institutional cryptocurrency traders through its subsidiary Cumberland. As marquee products for its trading operation, Cumberland will expand its liquidity and settlement capabilities into institutional grade in USDC and USYC where permitted. Cumberland's expertise and proprietary use cases will help drive innovation in the use of these products for more efficient and seamless collateral management. 

    USYC is already backed by many large digital asset trading firms and derivatives exchanges.

    In addition, alongside these strategic transactions, Circle is also announcing its planned deployment of Canton's native USDC, a leading public blockchain for fully private and secure financial applications. With over $3.6 trillion RWAs issued and over $1.5 trillion repos/month, Canton is already used and supported by major traditional banks, trading firms, asset managers and exchanges. As USYC is already supported in Canton, offering local integration into USDC will enable seamless and 24/7/365 convertibility between collateral and cash for use in TradFi markets.

    "For more than a decade, I have supported the opportunity to make traditional finance more efficient and sustainable through the use of public blockchains," said Don Wilson, CEO and Founder of DRW, a trading firm active in both traditional finance and cryptoassets. "I am excited to partner with Circle in its quest to make this a reality. By leveraging the Canton blockchain, which offers configurable privacy, for USDC and acquiring Hashnote, which issues USYC, Circle brings together the key elements needed to enable 24/7 collateral and amendment margin in both crypto and traditional markets. "

    https://www.circle.com/pressroom/circle-announces-acquisition-of-hashnote-and-usyc-tokenized-money-market-fund-alongside-strategic-partnership-with-global-trading-firm-drw

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