Circle, the platform which issues USD Coin (USDC), made the announcement of starting off with investing a part of its funds in Circle Reserve Fund, created earlier in a partnership with the global asset manager called BlackRock, as stated by Cointelegraph.
According to Cointelegraph, the step happened as part of Circle’s initiative to decrease risks and guarantee its holders the redeemability of their coins. Through a corporate blog post on November 3, 2022, it has been stated that the Circle Reserve Fund is a registered Rule 2a-7 government money market fund managed by BlackRock, along with a portfolio comprising of cash and short-dated US treasuries. It is believed that the fund is available only to Circle. The company is expected to use a portion of its proceeds for buying new Treasury holdings and store it in the Reserve Fund under the custody of the Bank of New York Mellon.
On the basis of information by Cointelegraph, the Circle Reserve Fund is in compliance with the Investment Company Act of 1940, including being subject to an independent board, and will report portfolio holdings on a daily basis. It is believed that the USDC is not considered popular across the American border. As reported by Coinbase, a cryptocurrency exchange, there is on a current basis three times more USDC purchased with US dollars, in comparison to other currencies. Reportedly, the US dollar-pegged cryptocurrency is the second-largest stablecoin in terms of market capitalisation under Tether (USDT).
Moreover, Cointelegraph noted that in September, 2022, Circle made the announcement that it expected to roll out its stablecoin across five additional networks, including Polkadot, Optimism, Near, Arbitrum and Cosmos.
(With insights from Cointelegraph)
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