Hashnote’s USDY Stablecoin Gains Traction in Tokenized Treasury Market
Hashnote, a regulated institutional-grade investment management platform for decentralized finance (DeFi), has made significant strides in the tokenized real-world asset (RWA) market with its US Yield Coin (USYC), often referred to as USDY in some contexts. The tokenized money market fund, backed by short-term U.S. Treasury Bills and repo/reverse-repo activities, has emerged as a leader in the rapidly growing tokenized Treasury sector, with a market capitalization of approximately $600 million [1].
A New Era for Stablecoins and Tokenized Assets
Hashnote’s USDY (USYC) is an ERC-20 token, on BSC and Ethereum [4], that represents an on-chain version of the Hashnote International Short Duration Yield Fund Ltd. (SDYF). Unlike traditional stablecoins such as Tether’s USDT or Circle’s USDC, which primarily maintain value stability without offering returns, USDY provides investors with daily yield disbursements derived from its underlying U.S. Treasury-backed holdings. This yield-bearing feature has positioned USDY as a preferred collateral option for institutional investors, crypto exchanges, and custodians, offering both stability and consistent returns.
The token’s integration with the broader blockchain economy, particularly through partnerships with DeFi protocols like Usual, has fueled its rapid growth. In December 2024, USDY surpassed BlackRock’s BUIDL to become the largest tokenized U.S. Treasury product, with a market cap exceeding $1.2 billion at its peak, driven largely by its role as the primary backing asset for Usual’s USD0 stablecoin. However, recent data indicates a decline in total value locked (TVL) to $900 million as of March 2025, reflecting market fluctuations and Usual’s efforts to diversify its reserves.
Circle’s Acquisition and Strategic Vision
In January 2025, Circle Internet Financial, the issuer of the $58 billion USDC stablecoin, acquired Hashnote in a landmark deal announced at the World Economic Forum in Davos, Switzerland [2]. The acquisition aims to integrate USDY with USDC, enabling seamless convertibility between cash and yield-bearing collateral on blockchains. Circle’s CEO, Jeremy Allaire, emphasized the deal’s significance, stating, “This marks a major moment in the evolution of the stablecoin market, as cash and yield-bearing short-duration treasury bill assets become fungible at the speed of blockchains.”
Circle has also partnered with Cumberland, a subsidiary of global trading firm DRW, to enhance liquidity and settlement capabilities for both USDC and USDY. Additionally, Circle plans to bring USDY under its Bermuda Digital Assets Business Act (DABA) license, leveraging Bermuda’s robust regulatory framework to further legitimize and scale USDY’s adoption.
The $14 Trillion Tokenization Opportunity
The tokenized real-world asset (RWA) market, currently valued at $18.1 billion as of March 2025, is poised for exponential growth, with projections estimating a market size of $14 trillion by 2030 [3], according to consultancy Oliver Wyman. Circle’s acquisition of Hashnote is seen as a pivotal moment in this race, signaling the entry of traditional finance giants into the tokenization space. Industry experts, including Robert Leshner of Superstate, have called the buyout the “firing gun” for the tokenization race, as Wall Street players like BlackRock, JPMorgan, and Goldman Sachs intensify their efforts to capture a share of this burgeoning market. The integration of yield-bearing assets like USDY with stablecoins is expected to drive institutional adoption, leveraging blockchain’s speed and efficiency to transform financial markets (source: DL News).
USDY’s Role in DeFi and Institutional Finance
USDY’s appeal lies in its ability to combine the stability of traditional stablecoins with the yield-generating potential of tokenized Treasuries. The token is minted and redeemed instantly via USDC or PayPal’s PYUSD, with same-day (T+0) redemption capabilities, offering unparalleled liquidity for investors. Its integration with platforms like Deribit, Fireblocks, and the Canton Network has further solidified its utility as a collateral asset in both crypto and traditional finance (TradFi) markets.
Hashnote’s Opportunistic Stablecoin Yield Strategy also complements USDY, capitalizing on high-yield opportunities in DeFi protocols like Kamino Finance and Orca. By deploying stablecoins into over-collateralized lending protocols and liquidity pools, Hashnote has achieved annual yields ranging from 15% to 40%, attracting investors seeking high-alpha returns.
Market Context and Future Outlook
The tokenized RWA market, valued at $18.1 billion as of March 2025, is projected to reach $30 trillion globally, driven by institutional adoption and the growing demand for yield-bearing assets. USDY faces competition from other tokenized Treasury products, such as BlackRock’s BUIDL ($630 million TVL) and Franklin Templeton’s FOBXX ($525 million TVL), but its integration with DeFi protocols and Circle’s backing positions it as a frontrunner.
However, challenges remain. The opaque nature of virtual currency markets and the lack of centralized pricing sources pose risks, as noted by Hashnote’s regulatory disclosures. The National Futures Association (NFA) oversees Hashnote’s commodity pools but lacks authority over underlying virtual currency transactions, highlighting the need for robust risk management.
Conclusion
Hashnote’s USDY has redefined the stablecoin landscape by offering a yield-bearing alternative that bridges DeFi and TradFi. With Circle’s acquisition and strategic partnerships, USDY is poised to play a pivotal role in the future of digital asset markets. As institutional adoption accelerates, Hashnote’s innovative approach to tokenized Treasuries underscores the transformative potential of blockchain-based financial products.