USDC Issuer Circle Moves $8.7B to Repo Agreements to Protect Reserves From U.S. Government Default

Stablecoin issuer Circle is adjusting the reserves backing its $30 billion USD Coin ($USDC) in anticipation of a potential U.S. government default on its debt. Understanding the potential risk, Circle is proactively taking steps to safeguard its USDC reserves.

In a significant move, USDC issuer Circle is moving $8.7 billion to repo agreements, in hopes of protection from a potential U.S. government default. The Circle Reserve Fund, managed by global investment management giant BlackRock, added $8.7 billion in overnight repurchase (repo) agreements to the portfolio as of May 16.

The Circle Reserve Fund, managed by BlackRock, added $8.7 billion in overnight repurchase (repo) agreements to the portfolio. These tri-party agreements serve as a crucial safeguard against potential financial instability stemming from a U.S. government issuer moves protect reserves.

According to the fund's website, the Circle Reserve Fund, managed by global investment management giant BlackRock, added $8.7 billion in overnight repurchase (repo) agreements. This strategic shift underscores Circle's commitment to maintaining the stability and security of USDC during uncertain economic times.

Circle’s reserve fund has ditched Treasury bills that mature beyond May 31, rotating assets to cash and overnight repurchase agreements instead, a company spokesperson confirmed. This proactive measure is designed to shield USDC reserves from the potential fallout of a U.S. government default. The Circle Reserve Fund, overseen by investment management firm BlackRock, added $8.7 billion in overnight repurchase (repo) agreements to its portfolio on May 16.