Fireblocks now enables customers to use Hashnote’s regulated tokenized money market fund, US Yield Coin (USYC), as a collateral asset on Deribit through Fireblocks Off Exchange. This significant milestone marks the first time a major crypto derivatives exchange is supporting a regulated tokenized money market fund, and the first time this type of token is being used as collateral.
USYC is a cross-collateral currency on Deribit. This means it can be used as collateral to trade derivative instruments regardless of the settlement currency. For example, USYC can be used as collateral to trade derivative instruments that are settled in BTC, ETH, or USDC.
All Deribit traders can buy, sell, and hold USYC in their Deribit accounts, or hold it off the exchange in Fireblocks while still capturing yield, subject to Hashnote’s KYC. They can also transfer USYC on-chain to any address whitelisted with Hashnote.
QCP Capital, the biggest market maker for USYC pairings, will also deploy capital via Fireblocks Off Exchange. Additionally, Fireblocks customers can hold USYC, transfer the asset via the Fireblocks Network, and interact with the Hashnote USYC smart contract to mint and redeem it.
Enabling greater collateral flexibility
Trading venues typically optimize their collateral strategies based on liquidity needs, risk assessment, and regulatory changes. As interest rates rise, market participants generally prefer to use non-cash collateral as the opportunity cost of holding cash increases. Allowing non-cash collateral increases the pool of available capital for trading venues.
Tokenized money market funds, such as USYC, offer a new form of non-cash collateral. By representing traditional money market funds on-chain, these tokens provide the benefits of being on-chain (including increased accessibility, 24/7 liquidity, and enhanced transferability) while also generating a yield. This makes tokenized funds an attractive option for market participants seeking efficient, non-cash collateral solutions that maximize capital flexibility.
About US Yield Coin (USYC)
USYC is an on-chain representation of Hashnote’s Short Duration Yield Fund (SDYF). SDYF invests primarily in reverse repo and U.S. government-backed securities, performing repo or reverse repo activities as the underlying asset of the USYC token, which is a fully permissioned token deployed on the Ethereum, Base, Canton, and NEAR blockchains.
USYC earns short-term risk-free rate returns (1). The fund benefits from the transaction speed, transparency, and composability of tokenization while eliminating virtually all of the protocol, custody, regulatory, and credit risks associated with other token projects.
Fireblocks has been an industry leader in MPC tech and is now leading the market in wallet-integrated off-exchange solutions. By integrating USYC for off-exchange collateral, Fireblocks continues to push market-changing solutions that add value to clients’ bottom lines.
To learn more about Fireblocks Off Exchange and how your organization can mitigate exchange counterparty risk, visit https://www.fireblocks.com/platforms/off-exchange/.
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