BlackRock May Open Door to US-Controlled Stalkcoins

The involvement of Wall Street firms in the stablecoin market could accelerate the development of regulations in the United States, creating a private alternative to central bank digital currency (CBDC).

According to crypto investor Ryan Sean Adams, the recent launch of BlackRock's tokenized fund in USD Coin (USDC) is another step in the ongoing integration of traditional finance and stablecoin providers.

“Stablecoins will happen in America because BlackRock and the banks want them to happen. It couldn't be more clear,” Adams said on X.

Circle, the USDC stablecoin provider, announced on April 11 that it has launched a feature that will allow holders of the BlackRock USD Institutional Digital Liquidity Fund (BUIDL) to transfer their shares to Circle in exchange for USDC. In other words, the functionality allows investors in the tokenized fund to convert their shares into the stablecoin 24 hours a day, thereby increasing shareholder liquidity.

BlackRock is a major investor in the circle. In April 2022, the companies announced a strategic partnership that included BlackRock investing in Circle's $400 million funding round. BlackRock manages the Circle Reserve Fund, a government money market fund in which Circle is the sole eligible investor.

“The new BlackRock BUIDL fund on Ethereum is a high-bandwidth pipeline between US Treasuries and USDC,” Adams explained, citing Circle's planned initial public offering (which also helps the stablecoin integrate with traditional markets).

“The banks will go back to stablecoins – by acquiring/partnering/taking over crypto-native companies – and lobbying for stablecoin legislation and making it happen down the road. The US has no political will to build a central bank digital currency. Stablecoins will be issued by private banks on public crypto networks like Ethereum. You have created a flaw with the coin.

Blackrock is already one of the biggest players in the crypto industry. The asset manager is behind the iShares Bitcoin Trust spot Bitcoin ETF, valued at $18.5 billion as of April. The company recently launched a tokenized fund, BUIDL, for investors to buy tokens that represent shares in the fund that invests in assets such as US Treasury bills.

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