Circle Enters Tokenization Race by Acquiring Hashnote, $1.3B Real-World Asset Issuer

Circle, the crypto company behind the $48 billion USDC stablecoin, said 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 annual World Economic Forum meeting. The companies didn't reveal pricing details.

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

Circle’s CEO, Jeremy Allaire, said this marks a significant step toward aligning traditional financial structures with the speed and transparency of blockchain-based 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,” Allaire said.

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

Tokenization and stablecoins

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

Stablecoins, a $200 billion asset class of cryptocurrencies with prices pegged predominantly to the U.S. dollar, are a crucial piece of infrastructure in tokenization efforts. They are used as a bridge between fiat money and digital assets and widely used for settling transactions on blockchain rails.

Tokenized RWAs like treasury bills and money market funds are quickly gaining traction among sophisticated investors and asset managers as collateral for trading. Unlike in traditional markets, blockchain-based assets promise transparency, accessibility and around-the-clock settlements. Treasury-backed tokens also allow investors to earn a yield while posted as collateral or margin for trades, enhancing returns compared to trades collateralized with fiat money or stablecoins.

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

USDC on Canton

Circle also announced that it struck a deal with Cumberland, a DRW-affiliated crypto trading firm and market maker, to provide liquidity and facilitate settlements for USDC and USYC. The partnership aims to expand USYC as a form of collateral on exchanges and custodial platforms.

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