In an Aug. 22 tweet, Choi said
that starting in September 2021, Coinbase’s USDC reserves will be held in cash and short-term U.S. government treasury bonds.
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At the time of this writing, there were 27.3 billion USDC in circulation, down slightly from 28 billion USDC earlier this month. USDC supply is up 600% so far this year, outperforming rival Tether by three times.
More conservative USDC investments
In May, Circle’s reserves supporting stablecoin expanded beyond cash and cash
equivalents. The company provided a more detailed breakdown of the composition of its reserves in July, adding clarity and insight into the funds supporting USDC.
In this latest announcement, Circle confirmed that they should have been quicker to inform customers of their reserves
Given the sentiment of the community, our commitment to trust and transparency, and the changing regulatory landscape, Circle, with the support of Centre and Coinbase, announced that it will now hold its USDC reserve entirely in cash and short-term US Treasury bonds.
Coinbase COO confirmed that these investment portfolio changes for USDC reserves, which began in May 2021, will not extend beyond September. It added that Coinbase will ensure that USDC’s investments revert to a “more conservative investment profile” by the end of next month.
The announcement said Circle is looking to expand its multi-chain versions of USDC beyond the five blockchains it is currently on. It added that it is also in the process of developing new non-dollar based digital currencies in countries on three continents.
Pending audit of Tether
Circle’s main rival, Tether
, has more than twice as many
Tether’s growth, however, has lagged behind Circle, with a 210% increase in supply so far this year.
In July, the company’s general counsel, Stuart Hoegner, promised that the audit would come “within months, not years.” According to Hoegner, Tether’s reserves are heavily weighted toward dollars, but also include cash equivalents, bonds, secured loans, cryptocurrency assets and other investments.
With roughly $44 billion issued this year alone, concerns about their backing have grown, and a full audit is strongly anticipated by both users and regulators.
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