BlackRock, world’s largest asset manager, invests in USDC stablecoin creator

abdelaziz Fathi

Boston-based fintech startup Circle has raised $400 million in new funding, adding to the list of crypto unicorns that have benefited from a bull run by investors.

The fresh financing saw participation from a swath of leading investors, most notably BlackRock, the world’s largest asset manager with almost $8 trillion in AUM. The funding was also bankrolled by existing investors including Fidelity Management and Research, Marshall Wace LLP and Fin Capital.

This round, plus the $440 million raised in 2021 and a $110 million Series E the stablecoin issuer collected in 2018, brings its total funding to nearly $1 billion.

“Dollar digital currencies like USDC are fueling a global economic transformation, and Circle’s technology infrastructure sits at the center of that change. This funding round  will drive the next evolution of Circle’s growth. It’s particularly gratifying to add BlackRock as a strategic investor in the company. We look forward to developing our partnership,” said Jeremy Allaire, Co-Founder and CEO of Circle.

In addition to its investment and role as a primary asset manager of USDC cash reserves, BlackRock has entered into a partnership with Circle to explore capital market applications for its stablecoin.

BlackRock made headlines last year when it added bitcoin futures to derivatives products that two of its funds can invest in. The development came shortly after CEO of BlackRock, Larry Fink, provided a somewhat bullish take on the world’s first cryptocurrency. In a relatively rare endorsement, Fink said Bitcoin has ‘caught the attention’ and could largely replace gold but warned of its growing popularity that has a real impact on the US dollar.

Back then, Fink, who has grown BlackRock into the world’s largest money-management corporation, dismissed bitcoin as nothing more than a vehicle for speculation and money laundering.

USDC market cap grows to $50 billion

Circle has been expanding the reach of the offering that is primarily focused on retail trading and investing to appeal for B2B partnerships. Currently, the crypto unicorn puts greater emphasis on its USD Coin (USDC), a stablecoin pegged to the US dollar. Furthermore, the company opens the doors for businesses with a dedicated account type that allows them to deposit, withdraw, send, receive, store and allocate funds to invest in cryptocurrencies.

Acting as a sort of safe haven where crypto traders can park their assets in volatile markets, USDC is an Ethereum-based ERC-20 coin, which makes it easy for wallets, exchanges and other smart contracts to interact with the token.

With nearly $50 billion worth of tokens in circulation, USDC continues its remarkable trajectory, growing 10x over the course of 2021. Now, it is the second-most widely used stablecoin, trailing only behind Tether’s USDT.

 

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