Circle To Invest in BlackRock Managed Circle Reserve Fund

USDC Issuer Circle Dissolves SPAC Agreement With Concord
  • Together with the asset manager, it established a government money market fund.
  • The official blog article states that it will be exclusive to Circle.

Circle, the stablecoin USDC’s issuer, recently made a public announcement that it will put a part of the USDC reserves into the Circle Reserve Fund. BlackRock established the SEC-compliant fund, which will invest mostly in cash and US Treasury securities.

Together with the asset manager, it established a government money market fund. The official blog article states that it will be exclusive to Circle. Since November 3, the company has been working to transfer the reserves backing the USDC stablecoin to the Circle Reserve Fund. This transition is scheduled to be completed by the end of the first quarter of 2023.

The announcement read,

“Today, through our partnership with BlackRock, we have begun investing in the Circle Reserve Fund to manage a portion of the USDC reserves. The Circle Reserve Fund is a registered Rule 2a-7 government money market fund managed by BlackRock Advisors, LLC, and its portfolio will consist of cash and short-dated U.S. Treasuries.”

Bear Market Impact

After BlackRock led Circle’s $400M fundraising round in April, the two companies expanded their strategic alliance. The asset manager was apparently assigned the role of “a primary asset manager of USDC cash reserves.”

Last year saw a huge increase in the use of stablecoins, but the current bear market has slowed that growth. Tether (USDT) held on to its lead, while USDC lagged well behind, allowing Binance USD (BUSD) to surge ahead.

Statistics from CoinMetrics show that the supply of USDC has been trending downward in recent weeks. However, the stablecoin remains the dominant quote asset in DeFi and on decentralized exchanges (DEXs).

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