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Circle Internet Group, the regulated financial technology company behind the $24 billion USDC stablecoin, has acquired Hashnote, the issuer of a $1.52 billion tokenised money market fund, as the stablecoin provider seeks to strengthen its position in digital asset markets and build bridges to traditional finance.
The deal, announced at the World Economic Forum in Davos, will see Circle integrate Hashnote's US Yield Coin (USYC) with its USD Coin (USDC) stablecoin. USYC, which was developed by Cumberland Labs, is currently the world's largest tokenised treasury and money market fund according to data provider RWA.xyz.
The integration aims to create seamless conversion between USDC, which is primarily used for payments and trading, and USYC, which generates yield from short-term treasury bills. This development could make USYC a preferred form of yield-bearing collateral across cryptocurrency exchanges, custodians and prime brokers.
Jeremy Allaire, CEO and Chairman of Circle, said: "The integration of USYC and Hashnote into Circle's platform marks a major moment in the evolution of the stablecoin market, as cash and yield-bearing short-duration treasury bill assets become fungible and convertible at the speed of blockchains and crypto capital markets. This is a huge unlock for a market that is increasingly being driven by institutional adoption, and where participants increasingly expect market structures that are common in TradFi. 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 crucial to driving and delivering these products at scale."
Alongside the acquisition, Circle has formed a strategic partnership with DRW, a major Chicago-based trading firm. DRW's cryptocurrency subsidiary Cumberland will provide liquidity for both USDC and USYC tokens where regulations permit.
Leo Mizuhara, CEO and Founder of Hashnote, commented: "Joining Circle increases our ability to rapidly scale adoption by pairing USDC, a widely-used, liquid payment and trading stablecoin, with USYC, a safe, Tokenised Money Market Fund for yield-bearing collateral."
Circle also announced plans to deploy USDC on the Canton Network, a blockchain platform specialising in private financial transactions. Canton currently processes over $3.6 trillion in tokenised assets and more than $1.5 trillion in monthly repo transactions.
Don Wilson, CEO and Founder of DRW, said: "For over a decade I have championed the opportunity for traditional finance to be made more efficient and resilient by leveraging public blockchains. I am excited to partner with Circle in its quest to make this a reality. By utilizing the Canton blockchain, which offers configurable privacy, for USDC, and acquiring Hashnote, which issues USYC, Circle unites the key elements necessary to enable 24/7 collateral and variation margin movement across both crypto and traditional markets."
The financial terms of the acquisition were not disclosed. USYC services are not available to US persons under Regulation S of the Securities Act of 1933.
