Circle's APAC Vice President revealed that 90% of USDC's asset reserves are custodied by BlackRock, while also discussing the potential for a Chinese Yuan-backed stablecoin to advance RMB internationalization.

Executive Summary

Circle's Asia-Pacific Vice President, David A. Katz, recently disclosed that approximately 90% of the USDC stablecoin's asset reserves are custodied by BlackRock, concurrently highlighting the potential for a Chinese Yuan (CNY) stablecoin to enhance RMB internationalization.

The Event in Detail

Circle, a prominent issuer of digital assets, confirmed that a significant portion of its USDC stablecoin reserves is managed by BlackRock, a global asset management firm. This arrangement is part of a four-year strategic memorandum of understanding, signed in March 2025, that designates BlackRock as the preferred partner for managing Circle's stablecoin reserves. Under this agreement, BlackRock oversees at least 90% of Circle's dollar custody reserves, excluding bank deposits, and has committed not to issue a competing dollar payment stablecoin.

The Circle Reserve Fund (USDXX), which held nearly $30 billion in net assets as of April 30, 2024, comprises short-dated US Treasuries, overnight US Treasury repurchase agreements, and cash, custodied at The Bank of New York Mellon and managed by BlackRock. USDC is explicitly backed 100% by highly liquid cash and cash-equivalent assets, offering 1:1 redemption for US dollars. Transparency is maintained through daily independent third-party reporting via BlackRock and weekly disclosures of reserve holdings. Monthly assurance that reserve values exceed circulating USDC is provided by a Big Four accounting firm, adhering to AICPA attestation standards.

Simultaneously, David A. Katz of Circle has discussed the strategic implications of issuing an RMB stablecoin to facilitate the internationalization of the Chinese Yuan. This discourse coincides with reports that BlackRock is planning to acquire approximately 10% of the shares in Circle's upcoming IPO, signaling a deepening integration between traditional finance and digital asset markets.

Market Implications

This disclosure reinforces confidence in USDC's stability, potentially boosting its adoption among institutional investors due to BlackRock's substantial involvement and oversight. The strategic partnership not only provides a robust framework for reserve management but also aligns Circle with a major traditional financial entity, lending credibility to the digital asset space. BlackRock's reported investment in Circle's IPO further underscores institutional trust in the future of regulated digital finance.

Moreover, the conversation around a CNY stablecoin introduces a potential new dynamic for future market expansion. Such a development could attract significant attention to stablecoin regulatory frameworks, especially concerning national currencies and their internationalization. The global stablecoin market has seen substantial growth, reaching an estimated $238 billion by May 2025, highlighting their increasing role in the digital economy.

Expert Commentary

David A. Katz emphasized that stablecoins are critical for cross-border business and require network security and 1:1 backing by real, high-quality, liquid assets held by suitable institutions. Industry analysts and a source close to Bank of China Hong Kong suggest that promoting a pilot for offshore Renminbi stablecoins could significantly enhance the efficiency of RMB internationalization, providing an alternative to the existing dollar-centric system. They view the current period as an opportune moment for such initiatives.

Broader Context

The push for a CNY stablecoin by entities like Circle aligns with China's broader ambitions to internationalize the Renminbi and establish a stronger presence in digital finance. While the United States has largely supported dollar-backed stablecoin innovation, a state-sanctioned yuan-backed stablecoin could provide a sovereign alternative, potentially funneling international demand towards Chinese digital assets and enhancing China's leadership in regulated digital finance.

Regulatory bodies globally are also advancing frameworks for stablecoins. The UK's Financial Conduct Authority (FCA), for instance, has proposed stringent rules for stablecoin issuers, including requirements for full reserve backing with high-quality, liquid assets, guaranteed par redemption for all holders, safeguarding reserves under a statutory trust, and maintaining base capital. These measures aim to protect consumers and ensure the stability and integrity of the stablecoin ecosystem, reflecting a global trend towards robust regulatory oversight.