Leo Mizuhara, CEO of Hashnote, cautions that not all so-called “on-chain treasuries” in the market are made equal.
Hashnote was the first crypto startup to emerge from Web3 incubator Cumberland Labs and counts Chicago-based trading giant Cumberland as a market maker. An integration with Copper brings Hashnote’s USYC to the custody firm’s clientele of around 300 large institutions and crypto trading platforms.
Blockchain-based versions of U.S. Treasury bonds and things like yield-bearing tokens and stablecoins have become popular as the trend for institution-friendly tokenization gathers pace within crypto. However, not all the tokenized Treasury-type offerings in the market are created equal, according to Hashnote CEO Leo Mizuhara.
“People are treating these on-chain treasuries as if they were as safe as something you’d see in normal finance, like a money market account,” Mizuhara said in an interview. “But different structures matter a lot; it’s not the same as being in a money market fund when you are in an SPV [special purpose vehicle] that owns Treasuries, for example, or an SPV that owns ETFs [exchange traded funds].”
Hashnote’s USYC token is based on the reverse repo, or holding Treasury Bills overnight with a guaranteed price the next day, Mizuhara pointed out and offers a net yield of about 4.8%.
“Not everyone gets access to the reverse repo window,” said Copper’s head of sales Michael Roberts in an interview. “That really is the mainstay of the big banks and some broker-dealers. Longer term, we’re working on a deeper integration where the token can persist and potentially be used as collateral as well.”
