Payments fintech company Circle revealed a breakdown of the assets backing the dollar-pegged stablecoin USDC, as part of efforts to ensure transparency and accountability.
Assets Backing USDC Stablecoin
In an attestation report by major accounting firm Grant Thornton, the company revealed the reserves backing USDC. A total of 22,176,182,251 USDC was in circulation at the time of the report, with the accounting giant confirming that the total fair value of Circle’s dollar-denominated assets was equal to the supply of USDC in circulation.
A breakdown of the reserves backing the stable coin showed that 61 percent of USDC reserves were held in case and cash reserves, which is equal to $13.4 billion. Also, 13 percent is held in Yankee Certificate of Deposits (CDs), a dollar-denominated savings vehicle issued by a foreign bank with a branch in the United States.
Furthermore, 12%, which totals $2.7 billion, is allocated to US Treasuries. Meanwhile, nine percent is held commercial paper, while the remaining five percent is allocated to Corporate Bonds.
In a blog post by Circle CEO Jeremy Allaire, the breakdown of USDC’s reserves is a way to ensure that every stable coin in circulation was equal to one dollar. Allaire also said that the Circle team was committed to being transparent, accountable, and trustworthy.
USDC rival Tether (USDT), the largest stable coin by market capitalization which has been subject to controversies, also had its attestation report.
As reported by BTCManager back in March, accounting firm Moore Cayman, revealed that every USDT in circulation was equally backed by the dollar.
Meanwhile, stablecoins have come under regulatory scrutiny in recent times, with the US authorities working towards issuing a regulatory framework for stablecoins. The Circle CEO noted the work carried out by the Presidential Working Group (PWG) in that regard, stating that “calls for building the future of banking, payments, and money can continue to remain a private sector activity with appropriate public sector and regulatory oversight, transparency and accountability.”
Circle is also planning to go public on the New York Stock Exchange (NYSE) via a merger with Concord Acquisition Corp, a publicly traded special purpose acquisition company (SPAC). The deal, if successful, will put Circle’s valuation at $4.5 billion.
The company recently partnered with payment processor giant Mastercard to enable businesses to offer crypto cards.
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