2 months ago 1 min read

BlackRock's Circle Reserve Fund has $12.79B Invested in


The Circle Reserve Fund, run by BlackRock, is where 30% of USDC's reserves are held, approximately $12.79 billion,

The percentage of USDC reserves held in the Circle Reserve Fund has increased to around $28.6 billion, or 65%, according to BlackRock's disclosure daily update page, since then.

For USDC users, this seems to be good news. In order to make USDC safer, Circle is handing over some of its control over the reserves to an outside manager who is subject to SEC scrutiny. The ability for USDC users to now get regular updates from BlackRock further increases transparency.

BlackRock gave Circle $400 million in funding in April. The asset manager indicated at the time that it was considering using USDC for capital market operations. Stablecoins aren't thought of as a risk-free settlement asset, nevertheless. As a result, the RRP would greatly enhance USDC's risk profile.

The Bank Policy Institute previously raised worry that the BlackRock fund used for USDC stablecoin reserves would have access to deposits from the Federal Reserve. The Bank Policy Institute, a research tank backed by banks, expressed concerns in a blog post that despite the stablecoin issuer's lack of a central bank account, some of the USDC stablecoin reserves might be kept at the Federal Reserve. If this were permitted, bank runs into the USDC stablecoin, which might be seen as being as good as a central bank digital currency, might occur in times of uncertainty when there is a flight to quality (CBDC).

For the stablecoin's issuer, Circle, BlackRock has been managing a sizable portion of the USDC stablecoin's reserve assets since November. A customized money market vehicle called The Circle Reserve Vehicle, created by BlackRock, invests in US short-dated Treasuries. It currently manages over two-thirds of the $44 billion stablecoin's assets, with 80% of its reserves held in Treasury bonds.

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