BlackRock, Fidelity and Others to Invest $400M in Stablecoin Issuer Circle

• BlackRock to Manage USDC Cash Reserves
• Circle Expects to Become the Standard in the Transition to Digital Money

Stablecoin issuer and renowned crypto firm Circle has secured a $400 million funding round led by several investment managers and other financial companies, notably: BlackRock, Inc., Fidelity, Fin Capital, and Marshall Wace LLP. The funding round is expected to close in the second quarter of 2022.

BlackRock to Manage USDC Cash Reserves

As per a press release, BlackRock —the world’s largest asset manager— will also become a strategic partner of Circle in an attempt to explore capital market applications for USDC. As such, BlackRock will function as “a primary asset manager of USDC cash reserves.”

The new investment round comes two months after the firm delayed its previous agreement with Concord Acquisition Corp, a SPAC (Special Purpose Acquisition Company) that sought to merge Circle and turned it into a publicly-traded company.

However, it seems Circle didn’t appreciate the first valuation of $4 billion given by the SPAC, so they are negotiating a new deal which, if approved by both parties, will turn Circle into a public company valued at $9 billion.

Jeremy Allaire, CEO of Circle, shared the news on his personal Twitter account, calling the investment round a “huge milestone on the road towards mainstream adoption of digital currency.”

1/ NEWS: Circle today announced a new $400M funding round and new strategic partnership with BlackRock focused on USDC. This is a huge milestone on the road towards mainstream adoption of digital currency. More below (link and thread). https://t.co/YALTlee87o

— Jeremy Allaire (@jerallaire) April 12, 2022

USDC is the second-largest stablecoin after Tether (USDT) with a market cap of approximately $50 billion. The stablecoin is pegged to the US Dollar —launched in 2018 by The Centre Consortium, co-founded by Circle Internet Financial and crypto exchange Coinbase. Each USDC is in essence a tokenised dollar, meaning that each stablecoin is 1:1 with the greenback.

Notably, this is the second-largest investment round raised by Circle. Back in May last year, the firm raised $440 million in a similar investment round led by several elite companies like the aforementioned, seeing participation from FTX, Digital Currency Group, Atlas Merchant Capital, and more.

Circle Expects to Become the Standard in the Transition to Digital Money

According to Allaire, the corporate partnership and financing will help USDC to become a preeminent standard as most countries across the globe are exploring digital currencies and blockchain technology.

Stablecoins such as USDC has been regarded as highly beneficial to the crypto industry in order to avoid volatility when trading crypto assets. Stablecoins and other digital assets have achieved a broader reach than just the decentralised finance ecosystem, however. For example, Janet Yellen pinpointed that stablecoins could greatly improve the US payment system, but would require proper study and regulation.