TLDR
- Circle acquires Hashnote, gaining control of USYC – the world’s largest tokenized money market fund valued at $1.25 billion
- Circle partners with Cumberland to integrate USYC with USDC stablecoin for enhanced liquidity
- RWA tokenization sector grows 36.9% to $7.89 billion, with projections of $50 billion by end of 2025
- BlackRock’s BUIDL fund on Ethereum reaches $500 million AUM, paying $2.1 million in monthly dividends
- Australian hedge fund Fortlake joins tokenization trend by converting its Sigma Opportunities Fund to digital tokens
Circle, a leading stablecoin issuer, has acquired Hashnote, bringing the world’s largest tokenized money market fund under its control. The purchase price remains undisclosed, but the acquired fund, known as USYC (Hashnote Short Duration Yield Coin), holds assets worth over $1.25 billion.
The USYC fund primarily invests in U.S. Treasury debt and reverse repurchase agreements. This acquisition marks Circle’s latest move to expand its presence in the digital asset market, where it competes with rival stablecoin issuer Tether.
To support the integration of USYC, Circle has formed a partnership with Cumberland, a major institutional crypto trading firm and subsidiary of DRW. Cumberland will play a key role in bridging USYC with Circle’s USDC stablecoin, aiming to improve liquidity and settlement capabilities across both crypto and traditional markets.
Jeremy Allaire, Circle’s CEO, shared his thoughts about the deal on social media platform X. He highlighted the potential to “bring yield-bearing collateral to crypto market structures” that operate continuously. Allaire emphasized that instant movement between cash and collateral represents a major goal in capital markets.
BREAKING NEWS: 3 big announcements from @circle.
1) We have acquired Hashnote, issuer of the world’s largest Tokenized Money Market Fund (USYC);
2) we have entered into a strategic partnership with global trading firm DRW to drive USDC and USDY in crypto and TradFi…
— Jeremy Allaire – jda.eth / jdallaire.sol (@jerallaire) January 21, 2025
The acquisition comes at a time when tokenized money market funds (TMMFs) are gaining attention. These blockchain-based versions of traditional financial assets offer investors faster ways to access yield-generating instruments.
Circle has also revealed plans to deploy native USDC on Canton, a blockchain platform designed for secure financial applications. Canton currently handles over $3.6 trillion in tokenized real-world assets and processes more than $1.5 trillion in monthly repo transactions.
The broader real-world asset (RWA) tokenization sector shows strong growth. Current data from DeFiLlama indicates the total value locked in these assets has increased by 36.9% over the past year, reaching $7.89 billion.
Industry forecasts suggest this figure could grow substantially. Some experts predict the sector will reach $50 billion by the end of 2025, indicating growing interest from traditional finance in blockchain technology.
Major financial institutions are already moving into this space. BlackRock, the world’s largest asset manager, launched its own fund on the Ethereum blockchain in March 2024. Their USD Institutional Digital Liquidity Fund (BUIDL) has accumulated approximately $500 million in assets under management.
The BUIDL fund has shown steady performance, distributing $2.12 million in dividends during July 2024, representing a 16% increase from the previous month. Total dividend payments from the fund have exceeded $7 million since its launch.
Traditional financial institutions continue to explore tokenization. In Australia, Fortlake Asset Management, recently named Fixed Income Manager of the Year, is working to tokenize its Sigma Opportunities Fund. This project involves partnerships with Backed, Sonic (formerly Fantom), and Chainlink.
The trend extends beyond individual companies. Tether, Circle’s main competitor in the stablecoin market, launched its own tokenization platform called Hadron in November 2024.
Cumberland’s involvement in Circle’s latest initiative aims to increase adoption across both crypto and traditional capital markets. The firm will focus on expanding liquidity and improving settlement processes for both USDC and USYC.
Circle positions USYC as a preferred yield-bearing collateral option for various financial institutions, including exchanges, custodians, and prime brokers in both crypto and traditional finance sectors.
The integration between USYC and USDC aims to enable seamless convertibility between cash and tokenized collateral, potentially streamlining operations for institutional users.
