- Circle’s Hashnote acquisition will rev up the tokenisation race, experts say.
- Wall Street giants like BlackRock and Goldman Sachs have already fired off their opening salvos.
- The tokenised assets market is expected to be worth $14 trillion by 2030.
Circle’s acquisition of Hashnote 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.
“Circle’s acquisition of Hashnote is the firing gun; the race to tokenise the world’s assets has begun,” Robert Leshner, CEO and co-founder of crypto-focused asset management firm Superstate, told DL News.
Wall Street increasingly takes a bullish look at tokenised assets, with consultant Oliver Wyman estimating that the sector could top $14 trillion by 2030.
Larry Fink, CEO of investment giant BlackRock, said in 2024 that the launch of spot Bitcoin exchange-traded funds were “stepping stones towards tokenisation.”
Last year, BlackRock launched BUIDL, an onchain fund backed by US Treasuries. Fellow asset manager Franklin Templeton has its own onchain US government money fund.
Financial giants JPMorgan and Goldman Sachs have also made moves to seize upon the massive tokenisation opportunity.
Circle’s Hashnote acquisition
Circle said it plans to integrate Hashnote’s $1.2 billion Treasury bond-backed US Yield Coin with its USDC stablecoin. The goal is to position USYC as a form of yield-bearing collateral on crypto exchanges, and with custodians and prime brokers, Circle said.
Stablecoins, like Circle’s USDC, are a $212 billion market. They grease the wheels of crypto trading, facilitate cheap cross-border remittances, and let crypto users gain exposure to the greenback.
While stablecoins are often backed by yield-bearing dollar equivalent assets like US Treasury bonds, they don’t usually pass on the money these backing assets generate to users.
“There is an enormous and immediate opportunity to bring yield-bearing collateral into crypto market structures,” Circle CEO Jeremy Allaire said on X, announcing the Hashnote acquisition.
By tying up USYC and USDC, Circle is positioning itself as a major contender in the yield-bearing collateral market.
TradFi jumps in
The ability to earn yield on stablecoins 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, told DL News
“This is exactly what [they’ve] been waiting for: yield-bearing collateral that works at the speed of crypto,” Manche said.
While Wall Street’s already made moves into tokenised assets, Circle’s acquisition will supercharge those efforts, he argued.
“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,” Manche added.
As the issuer of the second-biggest stablecoin, Circle isn’t starting from scratch. It’s seemingly well positioned to leverage the success of USDC to help USYC compete.
Circle is the second-biggest stablecoin issuer with over $50 billion worth 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 years 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. But it might not have that edge for long.
“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,” Labenbacher said.
Walls coming down
Along with the Hashnote acquisition, Circle is also deploying USDC on Canton Network.
With USYC already supported on the network, Circle said the move will enable around-the-clock convertibility between collateral and cash for use in traditional financial markets onchain.
“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 onchain 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 tokenised asset issuance and transfers, among other things.
Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.
