Coinbase crypto exchange and Digital Currency Company Circle who collaborated to support the latter’s USD coin will now be pegged by cash and U.S. treasury bonds only.
<h2><strong>USDC Now Backed by Cash and Treasury Bonds</strong></h2>
In a blog post <a href="https://www.centre.io/blog/usdc-reserves-composition" target="_blank" rel="nofollow noopener">published</a> on August 22, Circle has revealed that its USDC reserves are now backed entirely on cash and short duration US Treasuries only. The change will be reflected in future audit attestations to be carried out by its auditing partner, Grant Thornton, according to the company.
<blockquote><em>“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,”</em> the company wrote in the blogpost.<em>
</em></blockquote>
In a recently released report by Grant Thornton, the stablecoin showed a 60% backing of cash and cash equivalents while the remaining 40% by various forms of debts and treasury bonds.

Centre issues the $28 billion USDC stablecoin <a href="https://www.cryptoknowmics.com/news/coinbase-circle-criticized-for-policy-alteration-concerning-dollar-pegged-stablecoin-usdc/">backed</a> by Coinbase and Circle. USDC is the second-largest stablecoin globally with roughly $28 billion in market capitalization. Each coin is backed by about $1 in reserves.
<h2><strong>Coinbase Takes Ownership Over Failing to Clarify USDC Backings</strong></h2>
The recent update comes just a month after Circle shared in their <a href="https://www.centre.io/hubfs/pdfs/attestation/Grant-Thorton_circle_usdc_reserves_07162021.pdf?hsLang=en" target="_blank" rel="nofollow noopener">May report</a> about USDC reserves in late July. A month later, Coinbase changed the description for USDC on its website and dropped the wording that previously said each USDC was backed by one US dollar "in a bank account."

Responding to this, Coinbase President and COO Emilie Choi said in a tweet that Coinbase's recent statement of every USDC being “backed by a dollar in a bank account” could have been more clear.

Choi wrote: "That was a mistake and Coinbase takes ownership for that." She clarified that the changes in the investment portfolio for USDC reserves started in May 2021, it "will not extend past September."

https://twitter.com/emiliemc/status/1429664326382546949

USDC Stablecoin Now Backed by Cash and Treasury Bonds Only

Coinbase and Digital Currency Company Circle who collaborated to support the latter’s USD coin will now be pegged by cash and U.S. treasury bonds.

Jafrin is a cryptocurrency journalist/researcher fascinated by the world of decentralization. She is hopeful towards blockchain’s innovation and its potential to reshape the world for good. Currently, she is bringing out the best of cryptosphere via covering the latest ins and outs of the blockchain space.

USDC Stablecoin Now Backed by Cash and Treasury Bonds Only

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