Stablecoin issuer Circle Internet Financial has acquired Hashnote, the issuer of US Yield Coin (USYC), a tokenized real-world asset (RWA) fund.
In a Jan. 21 announcement, Circle said the deal “will enable USYC to emerge as a preferred form of yield-bearing collateral on crypto exchanges, and also with custodians and prime brokers.”
Hashnote’s USDY is the most popular tokenized money fund by market capitalization, with a total value locked (TVL) of roughly $1.25 billion, according to data provider RWA.xyz.
As part of the deal, the stablecoin issuer is also partnering with DRW, one of the largest institutional crypto traders. “[DRW] will expand its institutional-grade liquidity and settlement capabilities in USDC and USYC” to facilitate “more efficient and seamless collateral management,” said the company.
“Circle intends to fully integrate USYC with USDC, offering seamless access between TMMF [tokenized money market fund] collateral and USDC,” notes the announcement.
Top tokenized T-bill issuers by TVL. Source: RWA.xyz
Growing market
At a market capitalization of approximately $48 billion, Circle’s USD Coin (USDC) is the second most popular stablecoin after Tether’s USDt (USDT), which has a market capitalization of around $138 billion as of Jan. 21, according to CoinGecko.
Circle’s USDC has been gaining against USDT since December amid questions surrounding Tether’s compliance with the Markets in Crypto-Assets Regulation (MiCA), the European Union’s regulatory framework designed to standardize and regulate the crypto market.
Tokenized RWAs — digital tokens representing claims on anything from US Treasury bonds to artworks — are a $30-trillion market opportunity globally, Colin Butler, Polygon’s global head of institutional capital, told Cointelegraph in August.
Demand is surging for products that tokenize money market funds, which comprise US Treasury bills (T-bills) and other highly liquid yield-bearing assets.
Major competitors of Hashnote’s USDY include the BlackRock USD Institutional Digital Liquidity Fund (BUIDL) and Franklin OnChain US Government Money Fund (FOBXX), with TVL of approximately $630 million and $525 million, respectively.
In an October report, the US Treasury Department said T-bill tokenization “could lead both to operational improvements and to innovation in the Treasury market” but could also pose risks to financial stability.
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