Circle Acquires USYC Stablecoin Issuer Hashnote

Circle has acquired Hashnote, issuer of the USYC stablecoin incubated by Cumberland Labs.

The company announced the deal Tuesday (Jan. 21), noting that Cumberland Labs is the largest tokenized treasury and money market fund in the world, with $1.52 billion deployed into USYC as of last week.

According to a new release, Circle will integrate USYC with its USDC stablecoin, allowing USYC to become a preferred form of yield-bearing collateral on crypto exchanges, as well as with custodians and prime brokers.

“The integration of USYC and Hashnote into Circle’s platform marks a major moment in the evolution of the stablecoin market, as cash and yield-bearing short-duration treasury bill assets become fungible and convertible at the speed of blockchains and crypto capital markets,” said Jeremy Allaire, Circle’s chief executive.

“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.”

According to the release, the acquisition is bolstered by a strategic partnership with DRW, one of the largest institutional crypto traders through its subsidiary Cumberland.

“As marquee products for its trading operation, Cumberland will expand its institutional-grade liquidity and settlement capabilities in USDC and USYC, where permitted,” Circle said. “Cumberland’s expertise and own use cases will help drive innovation in the use of these products for more efficient and seamless collateral management.”

Earlier this week, Allaire said he expects that President Donald Trump will move quickly on new cryptocurrency rules, and that he hopes the administration rolls back the Securities and Exchange Commission’s Staff Accounting Bulletin 121.

This rule, the CEO argued, “effectively made it punitive for banks and financial institutions and corporations even to hold crypto assets on their balance sheet.”

As PYMNTS wrote recently, stablecoins are increasingly seen as a viable payment option, bridging the gap between the crypto world and traditional finance.

“Where stablecoins offer superior benefits, customers will naturally gravitate toward them,” FV Bank CEO Miles Paschini told PYMNTS last week.

Research by PYMNTS Intelligence has found that using cryptocurrencies for cross-border payments could be the winning use case that the industry has been searching for. The research showed that blockchain-based cross-border solutions, especially stablecoins, are being embraced by companies looking to find a better way to transact and expand internationally.