Circle, issuer of USDC stablecoin, received a massive investment of $400 million this week. The money was paid by BlackRock, the world’s largest asset manager, which plans to enter the stablecoin market strongly.
BlackRock has entered into a strategic partnership with Circle
In this sense, the manager intends to use a stablecoin within its traditional operations. The American asset manager has $9.5 trillion in assets under management. For Jeremy Allaire, CEO of Circle, the change will be transformative.
The fresh capital will be used to promote the company’s strategic growth “as demand for dollar digital currency and related financial services continues to scale globally,” Circle said in a statement.
According to Allaire, BlackRock already participates in the management of the assets that support the value of the stablecoin. The new investment is part of BlackRock’s strategy to further deepen these relationships.
“In addition to its role as the primary asset manager of USDC’s reserves, BlackRock has entered into a broader strategic partnership with Circle that includes exploring USDC’s capital market applications. We’re going to update the fundamental financial market infrastructure of the way dollars work in capital markets.
Our broader strategic partnership with BlackRock, announced today, will allow us to explore new use cases where USDC may be an efficient resource in the financial services value chain.”
Currently, the banking system does not move at the speed of the Internet, especially in international transfers. A low-value transaction can take up to three business days for a bank to process, for example.
There is also counterparty risk and settlement risk, as well as the possibility of blocking. In contrast, cryptocurrencies (including stablecoins) do not have these limitations. Transactions with USDC are much faster and, in most cases, the cost is negligible.
According to Allaire, if the manager adopts USDC in transactions, it will bring a “great opportunity”.
“There are all kinds of challenges that are there. And I think Blackrock plays an incredibly big role in capital markets, managing $10 trillion of assets and handling that infrastructure. This is a great opportunity to bring use cases to USDC,” he explained.
Natively, stablecoins already have several use cases: exchanges, decentralized finance (DeFi), NFTs and others. As for traditional markets, they could pave the way for cheaper, instantaneous transactions without the need for intermediaries.