(Bloomberg) — Circle Internet Financial Ltd., the issuer of USD Coin, the second-largest stablecoin, landed $400 million in funding from a group that includes BlackRock Inc. and Fidelity Management and Research LLC, in a sign of traditional finance’s growing acceptance of the exploding cryptocurrency industry.
BlackRock, based in New York, also entered into a broader partnership with Boston-based Circle, including exploring capital-market applications for USD Coin, in addition to serving as a primary asset manager for the stablecoin’s cash reserves. Other investors include Marshall Wace LLP and Fin Capital, according to a statement Tuesday.
The latest investment underscores how Wall Street’s biggest players are preparing for the wider adoption of cryptocurrencies and associated technologies. Last month, BlackRock Chief Executive Officer Larry Fink said the company is studying how digital currencies and stablecoins can be used to help clients.
“We believe digital assets and blockchain technologies are going to become increasingly relevant for BlackRock and our clients,” Chief Operating Officer Rob Goldstein and Salim Ramji, global head of ETFs and index investments, wrote in a memo to employees Tuesday. The company has been conducting work in crypto assets, stablecoins, tokenization of ownership for a range of asset types, and permissioned blockchains.
Stablecoins, typically pegged to a government-backed currency such as the dollar or euro, are a key part of the crypto universe because investors use them to buy and sell other digital currencies that are more volatile. USD Coin, currently the fifth-biggest cryptocurrency, has a market value of more than $50 billion, according to CoinGecko. USD Coin is the largest stablecoin by market value after Tether.
“Dollar digital currencies like USDC are fueling a global economic transformation,” Circle Chief Executive Officer Jeremy Allaire said in the statement. “It’s particularly gratifying to add BlackRock as a strategic investor in the company. We look forward to developing our partnership.”
In February, Circle revised the terms of a planned merger with special purpose acquisition company Concord Acquisition Corp., with the value of the transaction doubling to $9 billion.
The funding round is expected to close in the second quarter.
(Updates with BlackRock employee memo in fourth paragraph.)
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