Circle starts investing in its Reserve Fund to minimize risks and guarantee coin redeemability.
Circle, a peer-to-peer payment technology company and issuer of USD Coin (USDC), has started investing in the Circle Reserve Fund.
According to the announcement shared on November 3rd, by launching the Circle Reserve Fund, Circle aims to manage at least a “portion of the USDC reserves” to minimize risks and guarantee coin redeemability.
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The Circle Reserve Fund was launched through a partnership with a New York-based investment company and largest asset manager, BlackRock. Based on the announcement, the fund is a registered “Rule 2a-7government money market fund.” It is worth noting that the fund is managed by BlackRock Advisors, LLC, and consists of “cash and short-dated U.S. Treasuries.”
The company noted that when the collected Treasury matures, Circle will use the proceeding to acquire “new Treasuries by the Circle Reserve Fund.”
Circle emphasized that the fund is custodied at the Bank of New York Mellon. The bank is reportedly already a custodian of other USDC reserve Treasuries. In its announcement, Circle added:
The Circle Reserve Fund is subject to the requirements of the Investment Company Act of 1940, including being subject to an independent board, and will report portfolio holdings on a daily basis.
The Circle started investing on November 3rd and hopes to finish by the end of the first quarter of 2023.
In September, Circle announced its plans to expand USDC across five networks, including Polkadot, Near, Optimism, Cosmos, and Arbitrum. The Circle stablecoin is set to go live on Cosmos network at the start of 2023, with other networks incorporating USDC by the end of 2022.
At the time of writing, USD Coin (USDC) Market Cap is $42,462,403,429.
