Circle to put a portion of USDC reserves into new BlackRock fund

Quick Take

  • A portion of Circle’s reserves, which back the USDC stablecoin, will be placed in a new money market fund managed by BlackRock by early next year.
  • The Circle Reserve Fund will consist of cash and short-dated U.S. treasuries.

Circle, the issuer of the stablecoin USDC, set up a new fund with BlackRock to help manage the stablecoin's reserves.

Circle will place a portion of USDC reserves into the Circle Reserve Fund, a new money market vehicle managed by BlackRock Advisors. The portfolio will consist of cash and short-dated U.S. Treasuries, the company said. This new fund will only be open to Circle.

The company said it will use proceeds from maturing holdings to purchase new Treasuries by the fund, and it expects to be fully transitioned by the end of the first quarter of next year.

The new fund will be held in custody by Bank of New York Mellon, which already serves as the custodian for the Treasuries that currently make up the USDC reserve.

USDC reserves are currently $44.1 billion, which is split between $8.4 billion in cash and $35.7 billion in short-term Treasuries, according to Circle's weekly reserve breakdown.

BlackRock's relationship with Circle began when the world's largest asset manager, with around $8 trillion under management, invested in the startup's $400 million funding round and became a strategic partner to the crypto payments firm.

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