On March 13, 2025, Circle, the company behind the prominent stablecoin USDC, made a strategic announcement regarding the integration of its Hashnote Tokenized Money Market Fund (TMMF) into the regulatory framework of Bermuda through its existing Digital Assets Business Act (DABA) license. This development signals Circle’s commitment to aligning its operations with established regulatory standards, further solidifying its position in the digital assets landscape.
Hashnote, which Circle acquired in January 2025, has quickly risen to prominence as the issuer of USDY, the largest tokenized treasury and money market fund currently boasting a total value locked (TVL) of $900 million, as reported by DefiLlama. Notably, this figure marks a significant decline from a peak of $1.9 billion recorded on January 7 of the same year, highlighting the dynamic and sometimes volatile nature of digital asset markets.
Circle’s plans to integrate USDY with USDC are particularly noteworthy. This integration aims to facilitate smoother access between the TMMF and the stablecoin, potentially positioning USDY as the preferred yield-bearing collateral on various cryptocurrency exchanges. By fostering this connectivity, Circle foresees a bolstered utility for USDY, especially among custodians and brokers in the crypto ecosystem.
Bermuda stands out as a progressive jurisdiction in the realm of digital assets, having established one of the earliest legal frameworks for cryptocurrency regulation. Circle was the first firm to receive a license from the Bermuda Monetary Authority in September 2021, underlining Bermuda’s ambition to become a hub for digital finance. The DABA framework includes provisions that allow companies to operate under one of three types of licenses, demonstrating Bermuda’s commitment to fostering a robust yet secure digital asset market.
With the market for tokenized real-world assets (RWAs) expected to exceed $30 trillion globally, this initiative takes on heightened significance. Colin Butler, head of institutional capital at Polygon, articulated that the tokenization push is likely to be driven by high-net-worth individuals seeking alternative asset investments. Tokenization offers a transformative opportunity to enhance liquidity within traditionally illiquid markets, benefiting both issuers and investors.
In line with these projections, the market for tokenized U.S. Treasuries is anticipated to surpass a market capitalization of $3 billion by the end of 2024, with the current value sitting at around $4.2 billion as of the latest reports. Despite a 21% dip in Hashnote’s market cap over the past month, it remains the second-ranked protocol for tokenized U.S. Treasuries, showcasing its resilience in a competitive environment.
The overall market capitalization for RWAs has shown a robust upward trajectory, eclipsing $15.2 billion by the close of 2024. This growth has largely been fueled by institutional participation in various tokenization ventures across a diverse portfolio of real-world assets, including real estate, precious metals, and carbon credits. Notably, the RWA market reclaimed an all-time high of $17.1 billion in early February, and it has since moved even higher, reaching $18.1 billion recently.
Tokenization is fundamentally altering the financial landscape, creating new avenues for liquidity in previously stagnant asset classes and enabling more transparent and efficient transactions facilitated by blockchain technology. This transformative potential is not restricted to any single type of asset, granting the technology wider applicability and future growth prospects.
The integration of Hashnote’s TMMF with Circle’s established USDC will catalyze innovative investment opportunities and enhance the overall user experience within the digital asset ecosystem. As regulatory clarity continues to evolve, and institutions increasingly recognize the value of tokenization, companies like Circle stand poised to capitalize on the burgeoning demand for secure and efficient financial solutions.
Moreover, the implications of this integration extend beyond just operational efficiencies; they signify a broader shift towards a more interconnected financial ecosystem. By leveraging the strength of USDC in tandem with the yield-generating capabilities of USDY, Circle is setting the stage for creating robust financial products that appeal to a diverse range of investors and institutions.
In summary, Circle’s strategic move to bring Hashnote’s TMMF under Bermuda’s regulatory framework marks a proactive step towards enhancing the regulatory legitimacy and operational capabilities of digital asset offerings. The integration of USDY with USDC is likely to generate significant interest among market participants and catalyze further developments in the rapidly evolving landscape of tokenized assets.
With the tokenization of RWAs projected to unlock unprecedented market potential, the financial industry stands at the cusp of a transformation that could reshape investment strategies and asset management practices worldwide. Organizations engaging in this space will need to stay ahead of regulatory trends and market dynamics to fully leverage the immense opportunities that lie ahead in the tokenized asset marketplace.
As the sector continues to mature, we can anticipate further innovations and partnerships aimed at enhancing the utility and accessibility of digital assets, ultimately fostering a more inclusive and dynamic financial ecosystem.