USDC: BlackRock now retains part of Circle's stablecoin reserves

The American peer-to-peer payments company Circle is the issuer of the USDC stablecoin. Recently, the company published an article on its blog by Jeremy Fox-Geen, its chief financial officer. The latter explained that Circle works to “minimize liquidity, counterparty, operational, reputational and other risks, so USDC holders can be confident that their money is sound and redeemable on a 1:1 basis in US dollars at all times“. In his article, Jeremy Fox-Geen announced the decision taken by Circle to achieve its goal.

A fund solely dedicated to the stablecoin

According to the recent article published on its blog, Circle moved some of its USDC stablecoin reserves. Indeed, the crypto firm now has USDC on Circle Reserve Fund, a fund managed by BlackRock. It’s necessary to note that BlackRock is a $10 trillion asset management company.

The announcement

Through our partnership with BlackRock, we began investing in the Circle Reserve Fund to manage a portion of the USDC reserves. We expect the reserve mix to continue to be approximately 20% cash and 80% short-term US Treasuries“, could we read in the blog post.

The CFO pointed out that Circle Reserve Fund is only available to his company. He added that the fund will be used to acquire new treasury bills as Circle’s treasury bill holdings mature.

Circle Reserve Fund complies with applicable regulations

Chief Financial Officer Jeremy Fox-Geen clarified that Circle Reserve Fund is owned by the government money market. He added that the fund is “registered under Rule 2a-7, managed by BlackRock Advisors, LLC“. In addition, Circle Reserve Fund meets the requirements of the Investment Company Act of 1940.

In this context, the fund has an independent board of directors and must provide a daily update on the assets it holds. Finally, he isheld at the Bank of New York Mellon, which already serves as a depository for the treasuries that make up USDC’s reserve today“.

Circle’s announcement comes some time after Circle CEO Jeremy Allaire indicated that the company wants to become a full-reserve digital bank. “We believe the world needs a full reserve banking system“, had specified Jeremy Allaire.

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