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The US-based Bank Policy Institute (BPI) is raising concerns that a sizeable proportion of Circle's USDC stablecoin reserves could be parked at the Federal Reserve, despite Circle not having a central bank account. Since November, BlackRock has been managing about two-thirds of the reserve assets in a bespoke money market fund, the Circle Reserve Fund (CRF) , which invests mostly in U.S. short-dated Treasuries. The BPI claims that Blackrock has applied for the fund to access the Fed's overnight reverse repo (ON RRP) facility, which provides money funds and government-sponsored enterprises a standing option to invest overnight with the Fed at a fixed rate, currently 4.3%. This involves the fund buying Treasuries from the Fed, which are resold to the Fed at a future date at a slightly higher price. The net effect of the cash flows, with the transfer of money to the Fed, is not dissimilar to depositing the USDC reserve cash at the Federal Reserve. The use of the ON RRP by the CRF could effectively transform USDC into a "backdoor" synthetic central bank digital currency (CBDC) if all of the assets are parked there. https://bpi.com/will-usdcs-blackrock-money-fund-create-a-back-door-cbdc-give-usdc-an-account-at-the-fed-or-both/

JPMorgan has debuted its in-house blockchain-based tokenization application, the Tokenized Collateral Network (TCN) as it settled its first trade for BlackRock. The TCN, using blockchain technology, allows investors to transfer collateral ownership without moving assets in underlying ledgers. It was used by BlackRock to turn shares in one of its money market funds into digital tokens, which were then transferred to Barclays as collateral for an over-the-counter derivatives trade between the two institutions.

Blackrock and ARK amended their spot Bitcoin exchange-traded fund (ETF) filings to comply with the cash redemption model demanded by the U.S. Securities and Exchange Commission (SEC). The amendments relate to the cash creation and redemption model for proposed spot Bitcoin ETFs, with BlackRock and ARK accepting the cash redemption system rather than in-kind redemptions, which imply non-monetary payments like Bitcoin. However, both amended filings would permit them to create and redeem shares via in-kind transactions with regulatory approval.

BlackRock launched a new private spot Bitcoin (BTC) trust. The fund is only available to U.S. institutional investors and seeks to track the performance of Bitcoin, less the expenses and liabilities of the trust. Private investment trusts that do not solicit investments from retail investors do not need to register with regulatory authorities in the United States. But others, such as the Grayscale Bitcoin Investment Trust, can still become publicly traded (though not SEC-registered) on the over-the-counter markets.

BlackRock has applied to become the first U.S. spot-Bitcoin exchange-traded fund (ETF), according to a filing with the U.S. Securities and Exchange Commission (SEC). Coinbase would act as custodian for the iShares Bitcoin Trust securities, and they would trade on NASDAQ exchange if approved. However, it will be a long shot, as the SEC has denied all previous similar applications, citing market concerns and a lack of investor protections, among other things. https://www.sec.gov/Archives/edgar/data/1980994/000143774923017574/bit20230608_s1.htm

"Blackrock, the world's largest asset manager, has held another meeting with the U.S. Securities and Exchange Commission (SEC) to discuss its spot bitcoin exchange-traded fund (ETF) application. The firm has proposed a "revised in-kind" model for its spot bitcoin ETF that it believes will "resolve" the SEC's concerns. The regulator has reportedly indicated that it prefers spot bitcoin ETFs to use the cash creation method."

BlackRock is adding cash-settled Bitcoin futures as an eligible investment to three funds. It filed updated prospectuses with the U.S. Securities and Exchange Commission that included cash-settled Bitcoin futures among the assets they can buy. The three funds are the Global Allocation Fund, Strategic Income Opportunities Portfolio, Emerging Markets Flexible Dynamic Bond Portfolio.

BlackRock Financial Management posted a job ad for a VP-level blockchain lead to create and implement strategies designed to drive demand for the firm's offerings and enhance the value proposition to clients of the firm's investments and technology offerings. The candidates must have experience in: articulating the technological foundations of blockchain technology including cryptographic hash functions, distributed network consensus mechanisms, and public-private key cryptography; devising and articulating fundamental valuation methodologies for crypto-assets; evaluating game theory and decentralizing governance models associated with blockchain technology; and working with key drivers of blockchain networks' design and their impact on the four key dimensions of blockchain performance including speed, scalability, privacy, and security.

Chief investment officer Rick Rieder said Blackrock has "started to dabble a bit" into crypto investments. He described the volatility of cryptocurrencies like Bitcoin (BTC) as "extraordinary" but acknowledged that many investors were looking for "places that appreciate under the assumption that inflation moves higher as debts are building... Holding some portion of what you hold in cash in things like crypto seems to make some sense to me, but I wouldn't espouse a certain allocation or target holding."

Circle Internet Financial, a global internet finance firm and the issuer of USD Coin (USDC) has entered into an agreement for a $400 million funding round with investments from BlackRock, Fidelity, Marshall Wace LLP and Fin Capital. The funding round is expected to close in the second quarter. In addition to its corporate strategic investment and role as a primary asset manager of USDC cash reserves, BlackRock has entered into a broader strategic partnership with Circle, which includes exploring capital market applications for USDC.

Two more U.S.-based asset managers (Wisdom Tree and Invesco) re-filed with the US Securities and Exchange Commission (SEC) for spot bitcoin exchange-traded funds (ETFs) in the wake of last week's similar application by BlackRock. WisdomTree had made two approval attempts, which were rejected in December 2021 and October 2022. Invesco had previously teamed up with Galaxy Digital to file for the Invesco Galaxy Bitcoin ETF in September 2021, which never came to fruition (the application was presumably withdrawn).

Investment manager BlackRock has formed a partnership with Coinbase to make crypto-assets directly available to institutional investors. Mutual customers of Coinbase and BlackRock's investment management platform. The access will be granted through Coinbase Prime, an existing integrated trading platform for institutional crypto investors. Aladdin users will be able allow to manage their crypto-asset exposures directly in their existing portfolio management and trading workflows for a whole portfolio view of risk across asset classes. The platform integration and functions will be rolled in phases.

Blackrock's iShares Bitcoin Trust has been listed on the DTCC (Depository Trust & Clearing Corporation which clears NASDAQ trades) under the $IBTC ticker. This doesn't mean regulatory approval but the market is taking it is a sign that Blackrock is confident that its exchange-traded fund (ETF) will be approved. Also, in the latest amendment to the iShares Bitcoin Trust prospectus, BlackRock revealed that it planned to start seeding. Seeding an ETF is when "initial funding" is provided to purchase a few creation units, which in this case would mean Bitcoin in exchange for ETF shares which can be traded in the open market on day one.

BlackRock is pushing to have its money-market digital tokens more widely used as collateral for crypto derivatives trades, as Wall Street firms push deeper into digital asset markets. WisdomTree is also in conversations with prime brokerages, trading desks and crypto exchanges about the use of its fund tokens as collateral. If this type of usage takes off, it could reduce the reliance on unremunerated stablecoins like Tether among crypto traders. Users of such money-market fund tokens can earn interest rates of 4% to 5%. https://www.bloomberg.com/news/articles/2024-10-18/blackrock-wants-crypto-exchanges-to-use-buidl-token-as-collateral

The Federal Reserve Bank of New York (NY Fed) has curbed its counterparty criteria for its reverse-repurchase program (RRP) in a way that could prevent stablecoin issuer Circle from accessing the Fed facility. Funds "organized for a single beneficial owner," registered as "2a-7 funds" at the Securities and Exchange Commission (SEC), "generally will be deemed ineligible" under the new rules. The Circle Reserve Fund, managed by global investment management giant BlackRock Advisors, appears to fall into this category. https://www.newyorkfed.org/markets/opolicy/operating_policy_230425

SEC delays decision on spot bitcoin ETF proposals The U.S. Securities and Exchange Commission (SEC) will delay its decision on several proposals for spot bitcoin exchange-traded funds (ETFs). The affected applicants were BlackRock, Invesco, Bitwise, and Valkyrie. It was originally arranged for October 16-19. The delay may have something to do with the looming threat of a government shutdown in the United States.

Cryptocurrency fund manager Valkyrie is filing with the U.S. Securities and Exchange Commission (SEC) to launch a bitcoin spot exchange-traded fund (ETF). BlackRock, WisdomTree and Invesco have recently filed similar applications,  and Fidelity will reportedly follow suit. Valkyrie has already several bitcoin-related investment vehicles in the United States, including bitcoin futures ETFs and Valkyrie Bitcoin Miners ETF, which tracks securities of companies that derive their revenue or profits from bitcoin mining.

Asset manager Fidelity has refiled with the US Securities Exchange Commission (SEC) paperwork for its Wise Origin Bitcoin Trust spot bitcoin exchange-traded fund (ETF), weeks after BlackRock submitted paperwork for its iShares Bitcoin Trust, also a spot bitcoin ETF. Fidelity had originally applied to launch the Wise Origin Bitcoin Trust in 2021, but that effort it was rejected by the SEC in 2022.

JPMorgan Chase & Co is using blockchain for collateral settlements. The bank's first such transaction came on May 20, when two of its entities transferred the token representation of BlackRock money market fund shares as collateral on its private blockchain. The effort will allow investors to pledge a wider range of assets as collateral and use them outside of market operating hours... In the coming months, the bank plans to expand tokenized collaterals to include equities, fixed income and other asset types.

"Though rumors about BlackRock and Citadel are just that, it does seem very plausible that some large mainstream hedge fund was involved in the Terra depeg. That would be a major double-edged sword. On the one hand, it would mean crypto is regarded as a robust and trustworthy enough ecosystem that mainstream finance is willing to risk shorting it. The emergence of more such shorts would, furthermore, benefit the ecosystem long-term by providing a profit motive for asking hard questions about projects."