USDC to be Backed With Cash And U.S. Treasuries
- USDC reserves will transition to 100% cash and short duration U.S. Treasuries.
- The move reflects Circle’s effort to provide more security and transparency when it comes to USDC’s dollar peg.
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Circle, the company behind the USD Coin (USDC), announced it has transitioned USDC reserves to cash and short duration U.S. Treasuries. According to a press release published on 23 August, the changes to the stablecoin’s peg are set to be reflected in its September attestation.
Until July 2021, the company claimed that USDC was backed 1:1 with cash. However, in July, an attestation published by auditing company Grandt Thornton revealed that cash made up just over 60 percent of the stablecoin’s reserves. The other 40 percent was backed by various forms of debt securities and bonds.
The massive change in the stablecoin’s makeup is the company’s response to “engagement from USDC users, developers, and other stakeholders.” Centre, the consortium created by Circle and Coinbase to issue and manage USDC, said the move deepens its commitment to transparency and allows the company to explore new opportunities to collaborate with the community.
Since its inception, USDC’s reserves were bound by permissible investment rules under state money transmission regulations. Combined with Centre’s own reserve management standards, these rules provide consumer protection and ensure USDC keeps its 1:1 dollar peg.
“As industry and government work together on the appropriate future supervisory standards, Circle is committed to maintaining or exceeding those standards, driving innovation, and building reliable, trusted, secure, and compliant infrastructure for dollars on the internet,” said Jeremy Allaire, the Co-Founder and CEO of Circle.
- The digital ID project said Orb Operators received USDC payments as part of the project’s transitional phase after launch, and now that it is nearing its end Worldcoin will be switching to WLD payments.
- Worldcoin warned Orb Operators to check if they can claim rewards in their region as WLD are not available in the United States and “certain other restricted territories”.
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- SVB Financial Group has filed for a Chapter 11 court-supervised reorganization in the U.S. in order to “preserve value”.
- The company stressed it is no longer affiliated with Silicon Valley Bank, the closure of which sent ripples across the crypto industry.
- Despite the events of last week, Circle has been able to clear almost all USDC backlog, and redeemed $3.8 billions USDC between March 13 and March 15.
- The stablecoin issuer also went live with a new transaction banking partner for both domestic and international wires, and expects to bring more capabilities back soon.