BlackRock allegedly intends to purchase a 10% share in Circle’s forthcoming IPO.

BlackRock intends to acquire around 10% of the shares available in Circle’s upcoming initial public offering, as reported on May 28.

Sources close to the situation indicated that Circle and its stakeholders, including co-founder and CEO Jeremy Allaire, aim to generate $624 million through the IPO.

There has been significant demand for the offering, with orders reportedly surpassing the shares on offer, and pricing is set for June 4.

BlackRock manages the Circle Reserve Fund, a government money market fund that secures approximately 90% of the reserves backing Circle’s USDC stablecoin.

As of April 30, 2024, the fund stated nearly $30 billion in net assets based on Circle’s IPO filing.

The investment management firm could acquire its stake directly or via an affiliated entity, although the final agreement is still pending.

This IPO would strengthen the relationship between BlackRock and Circle, potentially making it one of the largest single-investor stakes in the cryptocurrency firm.

The filing also disclosed significant interest from major institutional investors, highlighting the growing demand for equity in the stablecoin issuer as it approaches public market entry.

Circle’s USDC holds the position of the second-largest US dollar-pegged stablecoin, featuring a market cap of $61.3 billion and playing a vital role in crypto transactions. As of April 30, the stablecoin reported a transfer volume of $10 trillion year-to-date according to relevant data.

Proposed legislation in Congress suggests that stablecoins could be backed by cash or government securities, a framework that USDC already implements through the Circle Reserve Fund.

Circle’s move to pursue a US-based IPO signifies broader attempts by cryptocurrency firms to achieve public market capitalization during a period of increasing regulatory acceptance. Kraken is also considering an IPO for 2026.

The IPO filing formalizes Circle’s long-planned listing strategy, which earlier included a canceled Special Purpose Acquisition Company deal in 2022.

With institutional support and a reserve fund overseen by the largest asset manager globally, Circle aims to enhance its operations within a more transparent and regulated capital framework.