USDC Reserves to Expand from Cash to US Treasuries
Coinbase president and COO Emilie Choi has taken to Twitter to announce that as of September 1, all reserves that back the second largest stablecoin USDC will be stored in cash and US government treasuries.
She shared a press release from the website of one of the companies that created USDC – Centre.
1/ Quick update on USDC. Starting September 2021, USDC reserves will be held in cash and short-duration US government treasuries. This is the approach we want for USDC reserves. https://t.co/29liaGg2LA— Emilie Choi (@emiliemc) August 23, 2021
Change in the strategy for USDC reserves
Choi tweeted that in a week’s time, USD reserves that back the USD Coin (USDC) will be stored in cash and short-duration US government Treasury bonds and this is the approach the emitters – Coinbase, Centre and Circle – want for all USDC reserves. The currency will still be backed at a 1:1 ratio.
She says that the changes in investment portfolio of the second most popular stablecoin will not finish in September and will be more diversified in the future.
USDC is the largest regulated stablecoin in the world. Its market capitalization value at the moment totals $27,007,704,394 and it is ranked nine on the CoinMarketCap scale of cryptocurrencies.
Meanwhile, Tether’s USDT remains on spot five with a capitalization of almost three times bigger - $64,871,751,926.
USDC community requires more transparency
According to the press release, USDC reserves are invested in accordance with investment rules allowed by state money transmission regulations and are made under the guidance of Centre’s Reserve Management Policy.
The funds backing USDC went beyond cash and its equivalents in May this year, and it July Circle published a report, detailing that. However, following the sentiment of the community who demanded higher transparency, Circle, Centre and Coinbase, will switch to holding USDC reserves only in cash and short duration US Treasuries.
The press release says that the USDC emitters are thus responding to the reaction of the coin users, its dev teams and stakeholders who want more transparency and more collaboration with the community.
USDC to launch on new blockchains soon
At the moment, USDC is utilized by major regulated crypto exchanges, in DeFi apps and people are actively using it for payments via number of apps that is constantly growing.
USDC runs on five blockchains, including Ethereum, as well and will soon launch on a few more networks.Source