Bitcoincurrency economist John Paul Koning said on social media that Circle’s latest attestation report shows that 30% of USDC’s reserves, worth about $12.79 billion, are invested in its government money market fund. The Circle Reserve Fund, managed by BlackRock, was at 0% through October. Since then, the percentage of USDC reserves invested in the Circle Reserve Fund has risen to approximately $28.6 billion, or 65%.
The news could be seen as a positive development for USDC users. Circle makes USDC more secure by handing over partial control of its USDC reserves to outside SEC-regulated administrators. The move also increases transparency, as USDC users can now receive regular updates from BlackRock on reserve management.
Circle Reserve Fund is a money market fund managed by BlackRock, one of the world’s largest asset management companies. Money market funds are investment vehicles that invest in short-term, high-quality debt instruments such as Treasury bills, commercial paper, and other short-term instruments. The goal of money market funds is to provide investors with stable, low-risk investment options.
The news that Circle is handing over partial control of its USDC reserves to an SEC-regulated external manager could be seen as a positive development for USDC users. It increases the stability and security of stablecoins and increases transparency for users. While it’s unclear why Circle made the change, it’s likely the company wanted to increase the appeal of USDC in order to gain a larger market share.