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Decentralised Finance (DeFi)
Digital Assets
Enterprise
Funding
M&A

Web3 finance firm Circle has agreed to a $400 million (£307m) funding round as part of a broad strategic partnership with BlackRock.

As the issuer of stablecoin USD Coin (USDC), Circle is responsible for the fifth largest cryptocurrency by market cap alongside a host of decentralised finance (DeFi) tools.

The funding round is expected to close in the second quarter with other investors including Marshall Wace LLP and Fin Capital.

In addition to the capital investment, BlackRock will become the primary asset manager of USDC cash reserves and explore capital market applications for the Circle stablecoin.

Jeremy Allaire, co-founder and CEO of Circle, said: “Dollar digital currencies like USDC are fuelling a global economic transformation, and Circle’s technology infrastructure sits at the centre of that change. This funding round will drive the next evolution of Circle’s growth.”

The new capital will be used to promote continued strategic growth “as demand for dollar digital currency and related financial services continues to scale globally,” Circle announced.

Whilst the company seems focused on pushing stablecoins further into the mainstream, it will have to contend with its older sibling, Tether (USDT), for top spot.

Released as RealCoin in 2014, Tether is four years USD Coin’s senior and boasts a market cap £20 billion larger.

Even more of a disparity exists between the two coins daily trading volume. At the time of publication, Tether’s daily volume sits at £51 billion, whilst USD Coin trails at a meagre £3 billion.

One way Circle could fund further capital investment to compete with Tether would be by going public, an avenue it has been exploring through a SPAC merger with the purpose-built Concord Acquisition Corp.

Previously valued at $4.5 billion (£3.46bn) in July 2021, Circle delayed the merger in February this year and doubled its valuation to $9 billion (£6.9bn).

Having terminated its initial agreement with Concord, the two companies are now once again in talks for a merger. A termination date has been set for December 2022.