A website named Ledger Insights posted a piece entitled, "Banks concerned USDC stablecoin will become 'backdoor CBDC' with BlackRock help." They explain, "The Bank Policy Institute, a bank-supported think tank, published a blog post raising concerns that a proportion of the USDC stablecoin reserves could be parked at the Federal Reserve, despite the stablecoin issuer not having a central bank account. If this were allowed, in times of uncertainty when there's a flight to quality, this could result in bank runs diverting cash into the USDC stablecoin, which might be perceived as being as good as a central bank digital currency (CBDC). Since November, BlackRock has been managing a large portion of the reserve assets of the USDC stablecoin on behalf of the stablecoin issuer, Circle. BlackRock created a bespoke money market fund, the Circle Reserve Fund, which invests in U.S. short-dated Treasuries. It currently manages around two thirds of the assets of the $44 billion stablecoin, which keeps 80% of its reserves in Treasuries." The article adds, "The BPI claims that BlackRock has applied for the RRP facility. It further asserted that 20% of USDC reserves currently held at banks could be shifted to the RRP program. After publication a Circle spokesperson told Ledger Insights via email, 'In time, we expect that the Circle Reserve Fund will apply for access to the Fed's RRP program. If access is received, we would have the option to move USDC cash reserves inside the fund and into the RRP program. We would also continue to maintain a portion of our cash reserves inside the regulated U.S. Banking system. The RRP route is potentially better than a synthetic CBDC. The latter involves a digital currency that is backed by a stablecoin issuer's cash held at the central bank. This reduces counterparty risk because there's no bank risk. However, the account still belongs to a private entity which means there is some risk, whereas the counterparty of the RRP is the Federal Reserve itself." (See also the Bank Policy Institute's "Circle’s Road to a Back-Door CBDC.")

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