Unveiling Circle’s Bold $900M Move: DABA License for Money Market Fund Boosts RWA Tokenization

In a strategic maneuver that signals a deeper integration within the burgeoning world of Real World Asset (RWA) tokenization, Circle, the powerhouse behind the stablecoin USDC, has announced its ambitious plans to bring its Hashnote Tokenized Money Market Fund (TMMF), valued at a staggering $900 million, under the regulatory umbrella of Bermuda’s Digital Assets Business Act (DABA) license. This move not only underscores Circle’s commitment to regulatory compliance but also sets the stage for a tighter synergy between its stablecoin ecosystem and yield-bearing opportunities within the crypto space. Let’s dive into what this means for the future of crypto finance and the expanding universe of RWA tokenization.

Decoding Circle’s DABA License Strategy for Money Market Fund

Circle’s decision to operate its Hashnote Tokenized Money Market Fund (TMMF) under Bermuda’s DABA license is a significant step. But what exactly does this entail? Here’s a breakdown:

• Regulatory Clarity: Bermuda has established itself as a forward-thinking jurisdiction with a clear legal and regulatory framework for digital assets. By leveraging its existing DABA license, obtained in September 2021, Circle ensures its TMMF operates within a compliant and recognized structure.
• Hashnote Acquisition: Circle’s acquisition of Hashnote in January 2025 was a strategic play. Hashnote is the issuer of USDY, a leading tokenized treasury and money market fund. Bringing TMMF under the DABA license is a post-acquisition integration step to streamline operations and enhance regulatory alignment.
• USDY and USDC Integration: The core of this strategy is to fully integrate USDY with USDC. This integration aims to make USDC the primary and most accessible form of collateral for USDY, effectively positioning USDY as the “preferred form” of yield-bearing collateral across crypto exchanges, custodial services, and brokerage platforms.

This integration is designed to simplify access to yield generation for USDC holders and enhance the utility of USDY within the broader crypto ecosystem.

The Vision: USDC as the Gateway to Yield via USDY

Circle’s vision is clear: to make USDC the seamless entry point into yield-generating opportunities through USDY. This strategic alignment offers several potential benefits:

• Simplified User Experience: Imagine easily converting USDC into USDY to earn yield and then seamlessly converting back to USDC when needed. This integration promises a frictionless experience for users seeking yield opportunities within the stablecoin ecosystem.
• Enhanced Utility for USDC: By becoming the primary collateral for USDY, USDC’s utility is significantly amplified. It’s not just a stable store of value but also a gateway to earning yield, making it even more attractive for users and institutions alike.
• Attracting Institutional Interest: The integration and regulatory clarity provided by the DABA license could attract more institutional investors looking for compliant and efficient ways to access yield in the crypto markets.

However, it’s worth noting that USDY’s Total Value Locked (TVL) has seen fluctuations, recently decreasing from $1.9 billion to $900 million. This volatility highlights the dynamic nature of the crypto market and the importance of understanding market trends.

Bermuda’s DABA License: A Regulatory Advantage

Why Bermuda? The choice of Bermuda and its DABA license is not arbitrary. Here’s why it matters:

• Pioneering Regulatory Framework: Bermuda was among the first jurisdictions to enact a comprehensive legal and regulatory framework specifically for digital assets. This proactive approach has positioned Bermuda as a crypto-friendly hub.
• Three License Types: The DABA framework offers three types of licenses, catering to different digital asset business models, providing flexibility and clarity for companies operating in the space.
• First Mover Advantage for Circle: Circle was the first crypto firm to secure a license under the Bermuda Monetary Authority in 2021, showcasing their early commitment to regulatory compliance and leveraging favorable jurisdictions.

By operating under the DABA license, Circle benefits from a recognized and respected regulatory environment, which can enhance trust and credibility in its RWA tokenization and yield-bearing product offerings.

The $30 Trillion Opportunity in RWA Tokenization

The broader context of Circle’s move is the explosive potential of RWA tokenization. Industry experts and analysts are increasingly bullish on this sector. Consider these points:

• Massive Market Potential: Projections indicate that the RWA tokenization market could reach a staggering $30 trillion globally. This enormous potential is driven by the ability to tokenize a vast array of assets, from real estate and commodities to traditional financial instruments.
• High-Net-Worth Individuals Driving Adoption: The initial push for RWA tokenization is expected to come from high-net-worth individuals seeking alternative investments. Tokenization unlocks liquidity in previously illiquid markets, making these assets more accessible and tradable.
• Tokenized US Treasurys on the Rise: The market for tokenized US Treasurys is already demonstrating significant growth, surpassing $4 billion in market capitalization. This segment alone highlights the tangible traction and investor appetite for tokenized traditional assets.

Hashnote itself is a significant player in the tokenized US Treasurys market, currently holding the No. 2 position. While it has experienced recent market cap fluctuations, its overall presence underscores the growing importance of tokenized government bonds within the RWA tokenization landscape.

Beyond Treasurys: The Expanding RWA Universe

While tokenized US Treasurys are gaining momentum, the potential of RWA tokenization extends far beyond. The market is diversifying rapidly, encompassing:

• Real Estate: Tokenizing real estate can fractionalize ownership, making property investment more accessible and liquid.
• Gold and Diamonds: Tokenization can streamline the trading and ownership of precious metals and gemstones, enhancing transparency and efficiency.
• Carbon Credits: Tokenized carbon credits can create more transparent and efficient carbon markets, supporting environmental sustainability initiatives.
• Music Royalties: Even unconventional assets like music royalties are being tokenized, offering artists and investors new avenues for monetization and investment.

The total market cap for RWAs has already surpassed $18 billion and continues to grow, fueled by institutional interest and the increasing recognition of tokenization’s benefits in creating liquidity and efficiency across various asset classes.

The Transformative Power of Tokenization

In conclusion, Circle’s strategic move to bring its money market fund under Bermuda’s DABA license is more than just a regulatory update; it’s a testament to the growing maturity and sophistication of the crypto market, particularly in the realm of RWA tokenization. By integrating USDY and USDC, Circle is simplifying access to yield and enhancing the utility of its stablecoin, while operating within a clear and respected regulatory framework. As the RWA market continues to expand, driven by its potential to unlock trillions of dollars in value, initiatives like Circle’s are paving the way for a future where traditional finance and blockchain technology converge to create a more efficient, transparent, and accessible financial ecosystem.