Stablecoin Issuing Circle Transfers Reserves from USDC to Fund Managed by BlackRock
U.S. peer-to-peer payments firm Circle has transferred some of its USD Coin (USDC) stablecoin reserves to a fund controlled by $10 trillion asset management firm BlackRock.
In a blog post written by Circle CFO Jeremy Fox-Geen, the stablecoin issuer says it is working to minimize liquidity, counterparty, operational and reputational risks to ensure USDC holders can exchange their cryptocurrency assets for US dollars in a 1:1 ratio. basis at a given time.
To achieve that goal, Fox-Geen says it is putting some of its reserves into BlackRock’s Circle Reserve Fund.
“Through our partnership with BlackRock, we began investing in the Circle Reserve Fund to manage a portion of USDC reserves. We expect the composition of the reserve to continue to be approximately 20% cash and 80% short-duration US Treasuries.
The Circle Reserve Fund is a Rule 2a-7 registered government money market fund managed by BlackRock Advisors, LLC and its portfolio will consist of cash and short-term US Treasuries.”
As per the blog post, the background is only available for Circle. Fox-Geen also says it plans to invest the proceeds of the company’s current Treasury holdings in BlackRock’s Circle Reserve Fund.
Last month, Circle CEO Jeremy Allaire said the company aspired to be a fully-reserve digital bank, as opposed to a fractional-reserve bank that only has a portion of depositor funds available at a time.