This is part of Circle’s ongoing Trust & Transparency series.
From the start, we’ve managed the USDC reserve to minimize risk — liquidity, counterparty, operational, reputational and more — so that USDC holders can be confident their money is sound and redeemable 1:1 for U.S. dollars at any time. This has guided our approach to regulation, liquidity and transparency and shaped our strategy of partnering with leading financial institutions.
Through our partnership with BlackRock, we have begun investing in the Circle Reserve Fund to manage a portion of the USDC reserves. We expect the reserve composition will continue to be approximately 20% cash and 80% short duration U.S. Treasuries.
The Circle Reserve Fund is a registered Rule 2a-7 government money market fund managed by BlackRock Advisors, LLC and its portfolio will consist of cash and short-dated U.S. Treasuries.
The Circle Reserve Fund is only available to Circle. As our existing Treasury holdings mature, the proceeds will be used to purchase new Treasuries by the Circle Reserve Fund. We began this process on November 3, 2022 and expect to be fully transitioned by the end of Q1 2023. The Fund is custodied at Bank of New York Mellon, which already serves as the custodian for the Treasuries that comprise the USDC reserve today.
The Circle Reserve Fund is subject to the requirements of the Investment Company Act of 1940, including being subject to an independent board, and will report portfolio holdings on a daily basis.
We invite you to learn more about the USDC reserve and Circle’s approach to building trust and transparency.