USDC April Audit Report Reveals Backing above 100 Percent
USD Coin (USDC) released its audit report attested by Grant Thornton LLP, which offered insight on the state of token issuance and fiat backing for April 2019. The report, released on May 18, 2019, is part of a monthly disclosure and makes USDC one of the most transparent fiat-backed stablecoins in the crypto ecosystem.
Audited, Attested, and Verified
Since the beginning of the recent wave of stablecoins, many companies have launched haphazard efforts to create a truly secure solution with few succeeding. Everyone involved with crypto is at the very least aware of Tether’s problems with maintaining its reserves, but many other stablecoins have major flaws in the way they’re managed too.
USDC and Paxos are two of the most trustworthy stablecoins based on proof of reserve data alone, with others like DAI and Reserve Protocol offering similar but more decentralized approaches. DAI’s peg, for instance, is calculated via collateralized ETH; Reserve, on the other hand, is algorithmically pegged to a portfolio of both traditional and crypto assets.
USDC’s latest report reveals that 293,184,174 tokens were issued in April of which the bank reserves that back the token amounts to 293,351,374 for the same time frame. The result is a 100.06 percent fiat to token ratio.
USDC is run by Circle Internet who has rapidly grown into one of the most respected names in the crypto ecosystem. Circle Invest, a platform for buying and selling cryptocurrencies, is on the road to becoming a competitor to Coinbase as the best platform for new users. In other news, the firm also bought cryptocurrency exchange Poloniex and are integrating the platform to increase adoption.
Trustless vs. Trustworthy
Bitcoin maximalists and hardcore cypherpunks believe the way forward is through trustless systems rather than trustworthy systems. Their argument stems from multiple instances where reputed financial institutions have manipulated their customers to protect their self-interests.
It’s an understandable stand, but it means companies like Coinbase and Circle do not fall into their good books.
Maximalism is on the rise, and it is proving to be a significant obstacle for stablecoins, particularly those not backed by a decentralized mechanism or algorithm. The scenario that seems most likely for now is that these bullheaded decentralization advocates will abstain for using stablecoins like USDC. Conversely, the target audience for stablecoins like TrueUSD, USDC, and PAX will be traders, investors, and institutions looking for a safe hedge in volatile times.