Circle, the Web3.0 unicorn that is in charge of issuing and maintaining the stablecoin USD Coin (USDC), has revealed that it has started building a strong new reserve fund called Circle Reserve Funds.

According to Jeremy Fox-Geen, the firm’s chief financial officer, Circle’s new reserve funds are deposited with BlackRock, further deepening its relationship with the world’s largest asset management firm.

The new reserve fund will be managed by BlackRock advisers and will be predominantly dominated by cash and short-term US Treasuries. As Jeremy pointed out, as the current USDC treasury matures, reserve treasury funds will be drawn to ensure reserve replacement to continually ensure 1:1 access to user funds.

“The Circle Reserve Fund is only available to Circle. As our existing Treasury bond holdings mature, the proceeds will be used to purchase new Treasury bonds by the Circle Reserve Fund,” Jeremy wrote in the official announcement. of the first quarter of 2023. The Fund is custodian at the Bank of New York Mellon, which already acts as custodian of the Treasury bonds that make up the USDC reserve today.”

Stablecoin issuers are uniquely primed for additional scrutiny from regulators, market watchers, and the broader ecosystem. While Circle has not been involved in any form of price manipulation or endorsement of enhanced alternative assets for its stablecoin, its main competitor, Tether Holdings, has had to respond to lawsuits and accusations directly claiming the misstatement of its trading assets. and reserve.

Circle USDC is currently the second largest stablecoin in the world after Tether and has a market capitalization of $42.2 billion at the time of writing, thanks to its growing utility. In keeping with plans to bolster its reserve, USDC will now be in a vantage point to truly live up to its name and remain stable across the board.

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