Circle enables USDC transfers to BlackRock’s first token fund

Cirque, the issuer of the major stablecoin USDC (USDC), has made it possible to transfer shares of the BlackRock USD Institutional Digital Liquidity Fund (BUIDL) to the stablecoin.

Circle on April 11 officially announced a new state-of-the-art contract functionality that allows BUIDL holders to transfer their shares to Circle for USDC.

Circle's smart contract functionality enables the exchange of BUIDL shares from USDC to Circle on the secondary market. According to the announcement, the smart contract will enable “near-real-time” BUIDL issuance that will serve investors 24/7.

Launched by Blackrock in March 2024, BUIDL is a tokenized fund that runs on the Ethereum blockchain to provide tokenized production of US dollars.

BUIDL allows investors to purchase tokens that represent shares in the fund, which invests in securities such as U.S. Treasury bills. The money is digitized in the form of tokens on the Ethereum blockchain, and the BUIDL is called a “digital liquid fund” because it works as an ERC-20 token.

The new investment vehicle is the first tokenized fund introduced by BlackRock, the fastest-growing Bitcoin (BTC) exchange-traded fund (ETF) operator in the United States.

According to Jeremy Allaire, founder and CEO of Circle, virtualization of real-world assets is a rapidly emerging product category.

“Asset tokenization is an important dimension of addressing investor pain points. USDC allows investors to move quickly out of tokenized assets, reducing costs and avoiding friction,” Allaire said.

Related: Binance Goes Round and Drops USDC Support on Tron

BlackRock is one of the biggest players in the cryptocurrency industry, operating the iShares Bitcoin Trust (IBIT) Position Bitcoin ETF, which holds 266,580 BTC worth $18.5 billion as of April 10. IBIT is one of the first Bitcoin ETFs launched in January 2024. Following historic approval by the US Securities and Exchange Commission.

BlackRock's latest collaboration follows years of collaboration within the crypto industry. In the year In 2022, Circle partnered with BlackRock to begin investing in the Circle Reserve Fund to manage a portion of USDC reserves. The company expects the mix to be about 20% cash and 80% short-term U.S. Treasuries.

The Circle Reserve Fund is a registered Rule 2a-7 government money market fund managed by BlackRock Advisors, whose portfolio consists of cash and short-term U.S. Treasuries.

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