Bloomberg: Circle IPO Draws BlackRock’s Interest with 10% Stake Plan

BlackRock, the world’s largest asset manager, is reportedly planning to acquire approximately 10% of the shares in Circle Internet Group’s upcoming initial public offering (IPO), according to a May 28 Bloomberg report citing anonymous sources.

Circle, the issuer of USD Coin (USDC), filed for its IPO on May 27, offering 24 million Class A shares at an expected price range of $24 to $26 per share, trading under the ticker CRCL. The IPO aims to raise up to $624 million, targeting a valuation of $6 billion.

Investor interest in the IPO is robust, with Bloomberg reporting that orders have significantly exceeded the available shares. Alongside BlackRock, ARK Invest has expressed interest in purchasing up to $150 million in shares, highlighting the appeal of Circle’s stablecoin business to institutional investors. However, BlackRock’s participation is not yet confirmed and may involve an affiliated entity or be reconsidered entirely.

Circle’s Role in the Stablecoin Ecosystem

Founded in 2013, Circle has established USDC as the second-largest stablecoin by market capitalization, with over $61.22 billion in circulation as of May 28, according to CoinMarketCap. USDC is a dollar-pegged token widely used across centralized crypto exchanges and decentralized finance (DeFi) protocols, offering stability for transactions and liquidity in digital asset markets.

BlackRock’s existing relationship with Circle strengthens the significance of its potential IPO investment. Since 2022, BlackRock has managed the Circle Reserve Fund, a government money market fund holding approximately $30 billion in assets, which backs 90% of USDC’s reserves as of April 30, 2024. This fund ensures USDC’s peg to the U.S. dollar, reinforcing its reliability for investors and users.

A Second Shot at Going Public

Circle’s IPO filing marks its latest attempt to enter public markets after a stalled effort in 2022, which was delayed due to economic uncertainty. The company also reportedly held discussions with crypto exchanges Coinbase and Ripple about potential acquisitions, though it ultimately pursued the IPO route. The current filing reflects a more favorable environment for crypto firms, with growing regulatory clarity and institutional interest in digital assets.

Broader Implications for Crypto

BlackRock’s potential stake in Circle aligns with its increasing engagement with digital assets. The firm has made significant inroads into the crypto space, notably through its iShares Bitcoin Trust (IBIT), which has seen consistent inflows and held $72.64 billion in shares as of May 29. BlackRock’s management of USDC’s reserves and its participation in Circle’s $400 million Series F funding round in 2022 further illustrate its strategic focus on crypto infrastructure.

Circle’s IPO, expected to be priced on June 4, could set a precedent for other crypto firms seeking public market access. With backing from major players like BlackRock and ARK Invest, the offering highlights the maturing relationship between institutional finance and the digital asset ecosystem.

Neither BlackRock nor Circle responded to requests for comment on the reported investment plans.