USD Coin (USDC) Now Backed by Only Cash and Treasury Bills
Center has announced via a blog post on August 22, 2021, that the financial instruments in its USD Coin (USDC) stablecoin reserves have been shrunk down to only the fiat dollar and United States Treasury Bills.
Circle Center Shrinks Reserve Holdings
Barely three months after Circle announced the expansion of its USDC reserves to include a vast array of U.S. regulated financial instruments, Center, the Circle, and Coinbase-backed organization that issues the world’s second-largest stablecoin, has backtracked on that move.
In a fresh post released August 22, 2021, the company made it clear that its USDC reserves have now been reversed to focus entirely on cash and short duration US Treasuries and the firm has promised that the change will be reflected in future audit attestations to be carried out by is auditing partner, Grant Thornton.
“Circle reserves expanded beyond cash and cash equivalents in May 2021, and the company provided a more detailed breakdown of reserve composition in July, adding clarity and insight into the funds backing USDC. Mindful of community sentiment, our commitment to trust and transparency, and an evolving regulatory landscape, Circle, with the support of Centre and Coinbase, has announced that it will now hold the USDC reserve entirely in cash and short duration US treasuries.”
According to the USDC reserves attestation report released recently by Grant Thornton, 61 percent of the stablecoin was backed by cash and cash equivalents, while other reserves were made up of Yankee certificate of deposits (13 percent), U.S. Treasuries, commercial paper (nine percent), and corporate bonds (five percent).
A Steady Growth
Since its launch during the bear market of 2018, the USD Coin (USDC) has continued to gain serious adoption globally, a growth that the firm claims have been majorly fuelled by its strong commitment to transparency and trust.
Not resting on its laurels, Circle, which could become a publicly-listed entity soon, has hinted that it’s putting preparations in top gear to implement features that would give the USDC community an opportunity to formally get involved and participate in Centre’s governance activities.
Presently, USDC is functional on five major blockchains, including Ethereum (ETH), Algorand (ALGO), Tron (TRX), and Stellar (XLM), with Centre working round the clock to make the stablecoin available on 10 more distributed ledger technology (DLT) networks in the near future.
At press time, the USDC market capitalization sits at $27.01 billion, only dwarfed by the tether (USDT) stablecoin, which is sitting comfortably at $64.89 billion, according to CoinMarketCap.