BlackRock Eyes 10% Stake in Circle IPO Amid $624 Million Offering

BlackRock is reportedly planning to acquire approximately 10% of the shares offered in Circle’s upcoming initial public offering (IPO). This move comes as Circle and its shareholders, including co-founder and CEO Jeremy Allaire, aim to raise $624 million through the offering. Orders for the IPO have reportedly exceeded the number of shares available, with the pricing scheduled for June 4.

BlackRock already manages the Circle Reserve Fund, a government money market fund that holds roughly 90% of the reserves backing Circle’s USDC stablecoin. The fund reported nearly $30 billion in net assets as of April 30, 2024, based on the Circle IPO filing. BlackRock could acquire its stake directly or through an affiliated entity, although its final participation remains subject to change.

This investment would deepen the existing relationship between BlackRock and Circle, as it would constitute one of the largest single-investor stakes in the crypto company. The IPO filing also revealed a combined interest from major institutional investors, indicating heightened demand for equity in the stablecoin issuer as it prepares to enter the public markets.

Circle’s USDC ranks as the second-largest US dollar-pegged stablecoin with a $61.3 billion market cap and plays a central role in crypto transfers. The stablecoin registered a $10 trillion year-to-date transfer volume as of April 30. Pending legislation in Congress proposes backing stablecoins with cash or government securities, a structure already in place for USDC through the Circle Reserve Fund.

Circle’s decision to proceed with a US-based IPO reflects broader efforts by crypto companies to secure public market capitalization at a time when federal regulatory policy is trending toward acceptance. The IPO filing formalizes Circle’s long-anticipated listing plans, which previously included a terminated Special Purpose Acquisition Company deal in 2022. With backing from institutional players and a reserve fund managed by the world’s largest asset manager, Circle is positioning itself to expand operations under a more transparent and regulated capital structure.