Circle Expands Tokenized Fund Reach by Incorporating Hashnote’s USYC in Bermuda

Circle Internet Group is making significant strides in the blockchain-based financial world by expanding its operations in Bermuda, incorporating the Hashnote Tokenized Money Market Fund (USYC) under its Digital Assets Business Act (DABA) license. This strategic move aims to bolster Circle’s presence in the burgeoning market for tokenized financial services, leveraging the $990 million asset-backed fund to enhance market liquidity and usage.

• Circle incorporates Hashnote’s USYC under Bermuda’s DABA license.
• USYC, valued at $990 million, to be integrated with USDC for enhanced liquidity.
• Partnerships with Cumberland and SBI VC Trade bolster USYC and USDC’s market reach.
• Tokenization of real-world assets seen as a massive $30-trillion opportunity.

Circle’s move to incorporate USYC under the DABA license in Bermuda is a testament to the company’s commitment to regulatory clarity and innovation in the digital asset space. The DABA, a regulatory framework for digital asset businesses, has made Bermuda an attractive jurisdiction for blockchain companies seeking stability and clear guidelines. By integrating USYC, a tokenized money market fund with $990 million in assets as of March 6, 2025, Circle is poised to serve as a valuable collateral provider for crypto exchanges, custodians, and institutional financial firms.

The integration of USYC with Circle’s stablecoin, USDC, is a strategic play to enhance market liquidity and usage. This move allows investors to move seamlessly between these two assets on the blockchain, potentially redefining the dynamics of money market funds and stablecoins. Imagine the ease with which you could now trade shares in a money market fund backed by real-world assets. It’s a bold step towards a future where traditional finance and decentralized systems converge more fluidly.

Since establishing its presence in Bermuda in 2021 under the oversight of the Bermuda Monetary Authority (BMA), Circle has been leveraging the island’s forward-thinking regulatory environment. The BMA’s approach provides the clarity needed for companies like Circle to innovate without the fear of sudden regulatory shifts. The Hon. E. David Burt, JP, MP, Premier of Bermuda, emphasized this point, stating:

Circle’s continued commitment to Bermuda demonstrates our successful approach to providing regulatory clarity for innovative financial services. Digital financial products like USYC and USDC are strengthening Bermuda’s digital connectivity and our leadership in international business markets.

In January 2025, Circle announced the launch of USDC and USYC on the Canton Network, a platform that supports an impressive $1.5 trillion in monthly repo transactions. This network is a crucial part of Circle’s strategy, facilitating the trading of tokenized real-world assets. Partnerships like the one with Cumberland, a crypto trading firm, are also pivotal. Cumberland’s role in providing liquidity and settlement support for USYC and USDC is like having a trusty sidekick in the liquidity game, ensuring these digital assets can thrive.

The global reach of Circle’s initiatives is further highlighted by SBI VC Trade’s recent acquisition of a license to operate as an Electronic Payments Provider in Japan. This license, approved by Japan’s Financial Services Agency (JFSA), allows for the distribution of USDC in Japan, marking it as the first and only global dollar stablecoin approved for use in the country. Jeremy Allaire, CEO of Circle, proudly noted:

USDC becomes the first and only global dollar stablecoin to become approved for use in Japan.

While Circle’s moves are undoubtedly exciting, it’s important to consider the broader context of tokenizing real-world assets (RWAs). Colin Butler of Polygon highlighted this trend, noting:

The tokenization of real-world assets represents a $30-trillion opportunity.

This statement underscores the potential impact of tokenization on traditional finance, offering liquidity to assets that were once considered illiquid. However, it’s worth questioning whether this truly democratizes finance or if it’s just another tool for financial giants to play in the crypto sandbox. While some see Circle’s move as a step towards a more decentralized future, others might worry it’s just another way for big finance to co-opt the crypto revolution.

Yet, the journey ahead is not without its challenges. Regulatory hurdles, market volatility, and the ever-present risk of scams and fraud are all part of the game. Circle isn’t just playing the regulatory game in Bermuda; they’re playing to win the World Series of tokenized assets. For those who believe in the power of decentralization and the promise of blockchain, it’s a game worth playing.

Key Questions and Takeaways

• What is Circle’s strategy in Bermuda?

  Circle’s strategy involves expanding its tokenized financial services by integrating Hashnote’s USYC under its DABA license, aiming to leverage Bermuda’s regulatory clarity for growth.

• How does USYC differ from traditional money market funds?

  USYC is a digital asset based on blockchains, allowing investors to trade shares, unlike traditional money market funds which are not blockchain-based.

• What are the benefits of integrating USYC with USDC?

  Integrating USYC with USDC can enhance market liquidity and usage, allowing seamless movement between the two assets, and establish USYC as valuable collateral for various financial entities.

• What role does the Canton Network play in Circle’s plans?

  The Canton Network facilitates the trading of real-world assets and supports significant monthly repo transactions, serving as a platform for launching USDC and USYC to expand their market reach.

• How is Circle engaging with institutional partnerships?

  Circle is actively pursuing institutional relationships, as seen in its partnerships with Cumberland for liquidity support and SBI VC Trade’s license to distribute USDC in Japan.

• What is the significance of tokenizing real-world assets (RWAs)?

  Tokenizing RWAs represents a $30-trillion opportunity, offering liquidity to traditionally illiquid assets and integrating traditional finance with decentralized systems.