Circle Expands USYC Fund Under Bermuda’s Regulatory Oversight

Circle Internet Group, the company behind the USDC stablecoin, has announced its plans to bring its newly acquired Hashnote Tokenized Money Market Fund (TMMF) under Bermuda’s regulatory oversight. This move is part of Circle’s strategy to expand its regulatory framework by integrating USYC, one of the largest tokenized money market funds, into its existing Digital Assets Business Act (DABA) license. Circle’s decision is bolstered by its long-standing relationship with the Bermuda Monetary Authority (BMA), which granted it a comprehensive license in 2021.

USYC, issued by Hashnote, has nearly $1 billion in deployed assets as of March 6, 2025. Circle expects this integration to increase USYC’s use as collateral among crypto exchanges, custodians, and prime brokers. Jeremy Allaire, CEO and Co-founder of Circle, highlighted that Bermuda’s regulatory approach aligns with the company’s operational goals for USYC. “The Bermuda Monetary Authority offers a forward-thinking regulatory environment that fosters trust, compliance, and transparency in the digital asset space,” Allaire stated.

The integration of USYC and USDC is designed to improve liquidity between digital assets and traditional financial instruments. Bermuda’s regulatory environment has structured policies for tokenized finance under the Digital Assets Business Act (DABA). Tokenized money market funds like USYC offer investors a way to access traditional financial instruments with the added efficiency, transparency, and accessibility of blockchain technology. This move aligns with the increasing institutional interest in real-world asset (RWA) tokenization, which has become a focal point for firms seeking regulatory clarity.

Circle’s expansion into Bermuda’s regulatory framework is part of a broader strategy to enhance its global presence. The company has previously received authorization under DIFC’s newly established crypto token framework in Dubai, marking a significant step in the UAE’s push to become a global hub for digital assets. The UAE’s Central Bank has introduced regulations for local stablecoins, including the AED Stablecoin, as part of its broader oversight of digital assets. Tether’s recent moves also reflect the growing competition in the stablecoin space, with the company aggressively expanding its presence in the UAE by announcing a partnership to launch a dirham-pegged stablecoin.

Institutional interest in stablecoins has increased, with jurisdictions such as Bermuda and the UAE developing regulatory frameworks for the sector. As Circle and Tether expand their footprints in different regulatory environments, their competition will likely influence the development of stablecoin frameworks and cross-border digital finance in 2025 and beyond. This strategic move by Circle underscores the growing adoption of tokenized financial products and the increasing institutional interest in real-world asset tokenization.