Circle Facilitates USDC Transfers for BlackRock’s Inaugural Tokenized Fund

Circle, the issuer of the prominent stablecoin USDC, now permits transfers of shares from the BlackRock USD Institutional Digital Liquidity Fund (BUIDL) to its stablecoin.

In an official announcement on April 11, Circle unveiled a new smart contract feature enabling BUIDL holders to exchange their shares for USDC.

This smart contract functionality streamlines the transfer of BUIDL shares for USDC on the secondary market, offering investors a “near-instant” off-ramp option available 24/7.

Launched by BlackRock in March 2024, BUIDL represents a tokenized fund operating on the Ethereum blockchain, providing U.S. dollar yields through tokenization.

Investors can acquire tokens representing shares in the fund, which primarily invests in assets like U.S. Treasury bills. Named the “digital liquidity fund,” BUIDL is digitized as tokens on the Ethereum blockchain, functioning as an ERC-20 token named BUIDL.

This innovative investment vehicle marks BlackRock’s foray into tokenized funds, adding to its portfolio, which includes the fastest-growing spot Bitcoin exchange-traded fund (ETF) in the United States.

Jeremy Allaire, co-founder and CEO of Circle, emphasizes the significance of asset tokenization as an evolving product category, highlighting USDC’s role in facilitating swift and cost-effective movement out of tokenized assets.

BlackRock’s involvement in the cryptocurrency space extends to managing the iShares Bitcoin Trust (IBIT), a spot Bitcoin ETF holding 266,580 BTC valued at $18.5 billion as of April 10. IBIT, launched in January 2024, was among the pioneering spot Bitcoin ETFs following regulatory approval by the U.S. Securities and Exchange Commission.

This collaboration between BlackRock and Circle builds upon their longstanding partnership in the crypto industry. In 2022, Circle began investing in the Circle Reserve Fund, working alongside BlackRock to manage a portion of the USDC reserves. The Circle Reserve Fund, managed by BlackRock Advisors, comprises cash and short-dated U.S. Treasuries, offering stability and liquidity.