Circle (USDC) announces plans to bring its Hashnote Tokenized Money Market Fund (TMMF) under Bermuda regulatory oversight

Circle, the creator of stablecoin USDC, announced on March 13 plans to bring its Hashnote Tokenized Money Market Fund (TMMF) under Bermuda regulatory oversight

Circle, the creator of stablecoin USDC (USDC), announced plans to bring its Hashnote Tokenized Money Market Fund (TMMF) product under Bermuda regulatory oversight through the company’s existing Digital Assets Business Act (DABA) license, according to an announcement on Monday.

Hashnote, which Circle acquired in January, is the issuer of USDY, the largest tokenized treasury and money market fund with a total value locked (TVL) of $900 million, according to DefiLlama. The fund’s TVL has fallen from $1.9 billion as of Jan. 7.

Hashnote USYC TVL over time. Source: DefiLlama

This move will fully integrate USDY with USDC, allowing for access between the TMMF and the stablecoin. The company believes that this will make USDY “the preferred form” of yield-bearing collateral on crypto exchanges, including for custodians and brokers.

“We are excited to continue expanding our operations in Bermuda, a jurisdiction that is at the forefront of digital asset regulation and innovation,” said Jeff Crane, president of Circle. “This move will enable us to offer even more cutting-edge products and services to our customers around the world.”

Bermuda enacts one of the first legal and regulatory frameworks for governing digital assets, according to law firm Freeman Law. Circle was the first firm in crypto to receive a license under the Bermuda Monetary Authority in September 2021.

Bermuda’s Digital Assets Business Act currently permits three types of licenses for companies conducting business under the Act. These licenses are (i) full banking licenses; (ii) licenses for money services businesses; and (iii) licenses for digital asset businesses.

Tokenized RWAs a ‘$30-trillion opportunity’

Earlier this year, Polygon’s head of institutional capital said that tokenized real-world assets (RWAs) are a $30-trillion market opportunity globally.

The executive believed that the push would likely come from high-net-worth individuals who will allocate money to alternative assets as tokenization creates liquidity in previously illiquid markets.

“There is a $30-trillion market opportunity for tokenized RWAs globally. I think over the next five years, we will see an integration of DeFi and Web3 with public markets and traditional finance institutions. We will see products and services that cater to the needs of both retail and institutional investors, expanding the use cases and applications of blockchain technology to create a more inclusive and efficient financial system.”

In August, it was predicted that tokenized US Treasurys would surpass a $3 billion market capitalization by the end of 2024.

According to the predictions from crypto RWA platform RWA.xyz, the tokenized US Treasurys market cap will reach $3 billion by the end of 2024. At the time of writing, the tokenized US Treasurys market cap is at $4.2 billion, with Hashnote being the No. 2 protocol for tokenized US Treasurys, although its market cap has fallen 21% in the past 30 days.

The overall market cap for RWAs surpassed $15.2 billion at the end of 2024, driven largely by institutional players who piloted tokenization projects related to a host of real-world goods, including real estate, gold, diamonds and carbon credits. The market cap initially reclaimed an all-time high of $17.1 billion on Feb. 3 but has since gone even further, rising to $18.1 billion at the time of this writing.

Tokenization is changing different areas of finance, including creating liquidity for illiquid assets and leveraging the blockchain to facilitate transparent and efficient transactions. It isn't limited to a single type of asset, which gives the technology broader use cases.