Circle Internet Financial said on Tuesday it entered a $400 million funding agreement with several asset managers, including the world’s largest, BlackRock Inc. The funding round, which also involves Fidelity Management, Marshall Wace, and Fin Capital, is expected to close in the second quarter.
Circle is the issuer of the USDC token , which was launched in 2018. The token is the second-largest stablecoin, with a market capital of over $50 billion.
The firm also entered a broader partnership with BlackRock, which will see the two exploring the application of USDC in capital markets.
Circle has institutional potential
Given USDC’s 1:1 peg to the dollar, the stablecoin could have potential applications in capital markets, given that it is able to process digital dollar transactions much faster than most conventional networks.
Circle CEO Jeremy Allaire said that the new capital would be put to use in expanding the firm’s operations. He also noted that it was “particularly gratifying” to add BlackRock as a strategic investor.
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The deal comes at a time when institutional interest in crypto is rapidly expanding. An increasing number of investors are clamouring for more direct investment options in crypto.
Circle had recently appointed BNY as the custodian for its USDC reserves- a move that gives the firm more credibility among institutional investors.
Circle also appears to be raising capital ahead of a $9 billion listing on the Nasdaq Exchange. The firm had earlier this year doubled the value of the deal from $4.5 billion, citing improved financial prospects.
BlackRock gets closer to crypto
The deal with Circle sees the world’s largest asset manager become further affiliated with cryptocurrencies, underlining the increased institutional interest in the space.
The move also follows recent comments from BlackRock CEO Larry Fink that the firm was warming up to the idea of investing in crypto.
BlackRock, which commands around $10 trillion in assets under management, is reportedly looking at offering crypto trading services. The firm’s new partnership with Circle could be a step towards that goal.
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