Circle Acquires Hashnote, Partners With Cumberland to Enhance USDC and USYC Liquidity

Stablecoin issuer Circle announced three updates aimed at improving access to tokenized yield-bearing products and institutional digital asset liquidity.

Crypto’s second-largest stablecoin issuer has announced three major updates to its product suite, aimed at improving access to tokenized yield-bearing products and institutional digital asset liquidity.

stablecoin issuer Circle has announced three major updates to its product suite, aimed at improving access to tokenized yield-bearing products and institutional digital asset liquidity.

In a triple announcement on Monday, Circle revealed that it has acquired Hashnote, the company behind the $1.3 billion on-chain money market USYC. This expansion into tokenized products will see Hashnote’s U.S. Yield Coin integrate with USDC, addressing “an enormous and immediate opportunity to bring yield-bearing collateral into the crypto market structure,” said Circle CEO Jeremy Allaire in a statement.

Hashnote, which launched in February 2023, was last seen being propped up by a $5 million investment from Cumberland Labs, a crypto venture startup backed by the institutional trading firm DRW.

As more and more institutions get involved in the digital asset market, we are taking what are common practices in traditional finance and importing those on-chain, but with the incredible superpowers of global, real-time settlement, programmability, and composability. Indeed, one of the holy grails of capital markets is the ability to move between cash and collateral instantly.

Jeremy Allaire, Circle CEO

In a related move, Circle has also partnered with DRW’s crypto market maker, Cumberland, to enhance liquidity and operations for USDC and USYC. This partnership is designed to attract more institutional participants in the digital asset space.

Finally, Circle also announced that it will be issuing its USDC stablecoin on Canton, a decentralized network designed to settle private transactions. According to Allaire, USYC’s presence on Canton will enable “24/7/365 convertibility between collateral and cash for use in TradFi markets on-chain.”

The $3.5 billion tokenization market continues to gain attention from crypto users, institutions, and regulators. Tokenization leverages blockchain technology to mint real-world assets as digital tokens, enabling traders to access these products on-chain.

According to Fortune, the global tokenization market could jump to a $13 billion ecosystem by 2032. Federal U.S. watchdogs like the Commodity Futures Trading Commission have reportedly mulled new rules for the industry, an idea that may gain traction with incoming pro-crypto officials like Trump-picked Caroline Pham.