Circle, the crypto firm behind the $48 billion USDC stablecoin, said on Tuesday that it has acquired tokenized real-world asset (RWA) issuer Hashnote.

The companies closed the deal this morning, a Circle spokesperson told CoinDesk, and was announced in Davos, Switzerland during the annual World Economic Forum meeting. The companies did not disclose pricing information.

Circle aims to integrate USYC with USDC, Circle’s flagship stablecoin, enabling convertibility between cash and yield-bearing security on blockchains, the press release said. Hashnote issues the $1.3 billion USYC token, which experienced massive growth last year to become the largest tokenized US financial product on the market, according to rwa.xyz data.

Circle CEO Jeremy Allaire said this marks a significant step towards aligning traditional financial structures with the speed and transparency of blockchain-based markets.

“This is a huge unlock for a market that is increasingly being driven by institutional adoption and where participants are increasingly expecting market structures that are common in TradFi,” Allaire said.

Circle shared plans a year ago to go public, and the crypto industry widely expects the IPO to happen later this year.

Tokenization and stablecoins

The acquisition underscores the synergies between two of the hottest trends in crypto: stablecoins and tokenization. Circle’s main stablecoin competitor Tether launched a tokenization platform last year.

Stablecoins, a $200 billion asset class of cryptocurrencies with prices predominantly pegged to the US dollar, are a crucial piece of infrastructure in tokenization efforts. They are used as a bridge between fiat money and digital assets and are widely used to settle transactions on blockchain rails.

Tokenized RWAs such as Treasury bills and money market funds are rapidly gaining traction among sophisticated investors and asset managers as collateral for trading. Unlike in traditional markets, blockchain-based assets promise transparency, availability and round-the-clock settlement. Treasury-backed tokens also allow investors to earn a return while collateralized or margined for trades, improving returns compared to trades backed by fiat money or stablecoins.

For example, Singapore-based hedge fund QCP Capital earlier in January executed a bitcoin (BTC) trade using BUIDL, the money market fund token issued by BlackRock and Securitize.

USDC at Canton

Circle also announced that it entered into an agreement with Cumberland, a DRW-affiliated crypto trading firm and market maker, to provide liquidity and facilitate settlements for USDC and USYC. The partnership aims to expand USYC as a form of security on exchanges and depository platforms.

In addition, Circle made plans to implement USDC on the Canton Network, a blockchain used by traditional financial institutions for real-world asset transactions. The integration with Canton would allow for constant liquidity between cash and collateral and enable seamless transfer between decentralized and traditional markets.