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⚡️ JUST IN: Circle plans to bring Hashnote’s $1B USYC fund under its Bermuda DABA license, integrating it with USDC to strengthen its role as yield-bearing collateral for exchanges, custodians, and brokers.

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XION, a layer 1 blockchain backed by Circle and Multicoin, becomes the first mainnet platform to comply with European Union regulations. The walletless blockchain, focused on bridging web2 and web3, announced the milestone in a press release shared with crypto.news on March 13. Following the news, the utility token—used for network fees, governance, and proof-of-stake security—bounced more than 10%. XION was trading around $0.90 at the time of writing. According to the venture capital-backed L1, EU compliance also sees it become the first blockchain network to release a Markets in Crypto-Assets whitepaper . XION achieved this milestone a few months after launching its mainnet and conducting a gamified initial token airdrop. The chain abstraction mainnet went live in early December, just days before the EU’s MiCA rules took full effect on December 30, 2024. With this achievement, XION is now the first layer 1 platform to align with MiCA’s Title II regulatory framework, which provides guidelines for governing crypto-assets across the European Union. The XION team plans to leverage the regulatory clarity that MiCA offers to expand its footprint in the region by targeting institutional investors. “By adhering to the EU’s evolving regulatory landscape, it ensures that institutions and users can both gain access to XION in a compliant manner, strengthening the foundation for broader adoption of Web3,” Burnt Banksy, founder at XION, said in a statement. Title II of the EU’s comprehensive market guidelines targets digital asset issuers, offerors, and providers looking to bring their crypto trading products to customers in the 27-member bloc. XION will use this compliance milestone to accelerate Web3 access, with its technology stack helping to remove the hurdles that hinder broader adoption. Generalized abstraction, meta accounts, and signature abstraction are key features of XION’s infrastructure layer.

Circle Internet Group is expanding its tokenized financial services in Bermuda. The company will bring the Hashnote Tokenized Money Market Fund under its existing Digital Assets Business Act license with the Bermuda Monetary Authority, according to a company press release. Hashnote issues USYC, a tokenized money market fund that held nearly $1 billion in assets as of March 6, 2025. Tokenized money market funds function similarly to traditional ones but are represented as digital assets on blockchain networks. Because they exist in digital form, investors can buy and sell shares of these funds more easily. Circle plans to integrate USYC with USDC ( USDC ), its widely used stablecoin , allowing users to move between them seamlessly. This move could position USYC as a key form of collateral for crypto exchanges, custodians, and financial firms handling digital assets. Collateral refers to assets that traders and institutions pledge to back loans or financial transactions. Circle has operated in Bermuda since 2021 under the BMA’s regulatory framework. The company’s CEO, Jeremy Allaire, said Bermuda’s approach to digital asset regulation makes it a natural fit for Circle’s expanding tokenized money market operations. By linking USYC to USDC, Circle aims to offer a more flexible way for institutions to access liquidity while earning yield from USYC’s underlying assets, which include U.S. Treasuries and other short-term investments.

Decentralized finance protocol Compound is marching ahead with plans to tap into its competitor Morpho with the launch of new lending vaults on Polygon. The new vaults went live on March 13 at 11:30 a.m. Eastern Time. It comes after a governance proposal aimed at bringing Morpho ( MORPHO )-powered vaults to Polygon ( POL ). Gauntlet and Compound ( COMP ) are launching the new lending vaults with $3 million in incentives – $1.5 million each from Compound and Polygon. While this move has already been a major talking point for COMP holders and the broader DeFi community, the announcement signals a significant shift in the decentralized lending space. Essentially, Compound is transitioning from its own technology stack to Morpho’s infrastructure — a major development in the DeFi landscape. Morpho co-founder and CEO Paul Frambot described the development as a “full-circle moment.” “We’ve come full circle with Compound choosing to build on Morpho. Morpho started as an optimizer on top of Compound before evolving into a fully independent lending primitive. Now, Compound is transitioning to build on Morpho,” Frambot noted. In January, Gauntlet introduced the proposal targeting the new lending vaults on Polygon. The platform viewed the collaboration as a strategy to improve risk controls, accelerate asset listings, and offer a sustainable path forward for Compound. Notably, Compound has seen its market share decline as Aave ( AAVE ) and Morpho grow, with Aave’s v4 seen as an upgrade that would further shrink Compound’s revenue and market size. Using Morpho to generate the yield, criticized by others, is a pathway to benefiting COMP holders, per the governance proposal. Compound will leverage Morpho’s lending infrastructure, Gauntlet’s risk management framework, and Polygon PoS’s low fees and deep liquidity to reshape the on-chain lending landscape. Morpho, which raised $50 million in a funding round backed by Coinbase Ventures and a16z in 2024, currently has a total value locked of over $3 billion. The DeFi giant Aave’s TVL per DeFiLlama is over $17 billion and Compound’s is $2.3 billion .