Paxos, Hashnote partner for PayPal stablecoin and USYC token integration

Digital asset manager Hashnote said it is partnering with Paxos as the two companies plan to roll out an integration between PayPal's stablecoin and the yield-bearing USYC token, according to a statement.

PayPal launched its PYUSD stablecoin last year in conjunction with Paxos. Now by partnering with Paxos, Hashnote aims to improve settlement for its USYC token, which is backed by investment in U.S. Treasury Bills, the company's statement said.

"Hashnote initiated this partnership with Paxos, selecting PYUSD as our stablecoin of choice, because we see it as the future frontrunner in the stablecoin space," Hashnote CEO Leo Mizuhara told The Block. "The critical advantage for all our stakeholders comes from the ability to instantly mint and redeem between PYUSD and USYC, a process that not only enhances liquidity but also positions us at the forefront of yield generation in the digital asset realm."

The PYUSD-USYC integration will facilitate a "two-way atomic settlement process" that allows for instantaneous conversions between the two tokens, Hashnote's statement said. 

According to Hashnote, USYC is only accessible to investors outside the U.S. and is "subject to eligibility restrictions and a $100,000 minimum investment."  But U.S. investors "can get exposure to USYC through the Hashnote Feeder Fund," the firm also said.

PYUSD's market cap surpassed $300 million at the beginning of this year before shrinking considerably during March, according to The Block's Data Dashboard.