BlackRock Will Handle Circle’s USDC Cash Reserves In New Funding Round

BlackRock will handle Circle’s USDC cash reserves for a new funding round while Circle projected $438 million in revenue and $2.2 billion in 2030 as we can see more today in our latest crypto news.

Blackrock is a huge asset management firm while Circle issues the USDC stablecoin so now Blackrock will handle as a strategic partner in Circle. The crypto payments company Circle announced a new $400 million round by asset management company BlackRock with more investmetns from Fidelity Management and Research, Fin Capital, and Marshall Wace LLP. BlackRock will become the main asset manager of the USDC cash reserve with the fiat currency backing the stablecoin.

It said it will rely on the Bank of New York Mellon to be the main custodian of the USDC reserve and the CEO Jeremy Allaire but hasn’t commented on how the custodianship will be split among BNY Mellon, BlackRock and others but then said that it will explore new ways to apply USDC in the traditional capital markets. It can be lucrative for the asset managers but Circle is valued at $9 billion and announced the plans to go public which projected $438 million in revenue from the stablecoin reserves for his year set at $2.2 billion.

USDC that Circle partnered with Coinbase and took a bite of Tether’s market dominance so according to the data from CoinMarketCap, USDC is the second biggest stable coin with a circulating supply of 50.6 billion compared to the Tether’s 82.6 billion. One year ago, USDT circulation was set at 45.9 billion to 11.3 billion whcih means USDC closed the gap. Circle’s funding deal with the traditional financial institutions and the regulatory compliance efforts could put it on track to surpass Tether and had a three-year head start.

Circle controls a lot more than Tether does which held just $4.2 billion of its reserves with most of it invested in tokens, bonds, and short-term company debt known as the commercial paper. The rub-on commercial paper, as Jerome Powell said that it is liquid until the crisis hits which means a run on stablecoin redemptions that can lead to USDT losing its peg. While the CTO Paolo Ardoino that the company is committed to reducing the percentage of the reserves held in the commercial paper while Circle is most along the line which suits regulators and banking institutions eager to assure the investors that the stablecoin is backed by dollars.

Circle said it will put the reserves in cash and shot-term US treasuries and in 2021 it attested that out of all assets it was allocated cash and the cash equivalents which refer to the liquid investments that mature in the 90 days of purcahse.