Circle’s Hashnote Acquisition Will Unleash a “Wave of Traditional Finance Players” Eager to Tokenise Real-World Assets

That’s according to industry experts speaking with DL News after stablecoin issuer Circle announced Tuesday that it’s buying Hashnote, the largest tokenised treasury fund in the world.

Stablecoin issuer Circle’s recent acquisition of Hashnote is set to unleash a wave of traditional finance players eager to tokenize real-world assets, according to industry experts.

Circle announced Tuesday that it’s buying Hashnote, the world’s largest tokenized treasury fund, for an undisclosed sum. The acquisition will see Hashnote’s flagship product, US Yield Coin (USYC), integrated with Circle’s USDC stablecoin.

“Circle’s acquisition of Hashnote is the firing gun; the race to tokenize the world’s assets has begun,” Robert Leshner, CEO and co-founder of crypto-focused asset management firm Superstate, told DL News.

“This is especially appealing to institutional investors who are eager to take advantage of the increased speed and efficiency of blockchains,” Rushi Manche, co-founder of Move blockchain network Movement Labs, added.

“Watch this space — we’re about to see a wave of traditional finance players jump in now that there’s a blueprint for generating real yield with the guardrails they need.”

Wall Street has already made some moves into tokenized assets, but experts say Circle’s acquisition will supercharge those efforts.

“It is highly likely that other stablecoin issuers will emulate Circle’s approach,” Thomas Labenbacher, CEO of digital securities platform Assetera, told DL News.

“Adding yield-bearing capabilities to a stablecoin enhances its functionality beyond payments, offering investment and collateral opportunities.”

Circle, the issuer of the second-biggest stablecoin, isn’t starting from scratch. It’s well positioned to help USYC compete, especially given the success of USDC.

As the second-biggest stablecoin issuer, Circle has over $50 billion of USDC in circulation. It was once a close competitor to market leader Tether. In 2022, Tether had just $10 billion more of its USDT stablecoin in circulation than Circle’s USDC.

However, in recent times that gap has widened, with Tether now issuing $138 billion USDT to Circle’s $50 billion USDC. By providing an easy route for USDC holders to earn yield, Circle’s could regain some lost ground.

In addition to the Hashnote acquisition, Circle is also deploying USDC on Canton Network. With USYC already supported on the network, the move will enable around-the-clock convertibility between collateral and cash for use in traditional financial markets on-chain.

“That they’re deploying on Canton Network, which already handles trillions in real-world assets, shows that the walls between TradFi and digital assets are coming down fast,” Manche said.

Canton Network is a public blockchain with on-chain privacy features, which make it a popular choice for regulated financial institutions.

Dozens of major banks, such as Bank of America, Goldman Sachs, and Standard Chartered, are experimenting with Canton Network for tokenized asset issuance and transfers, among other things.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.