Circle Says USDC Reserves Are Fully Backed By Cash And Short-Term US Treasuries – Bitcoin News

On May 13, Circle’s chief financial officer, Jeremy Fox-Jane, published a blog post titled “How to be Stable,” in the wake of the fallout from the collapse of the stablecoin Terra. Circle’s chief financial officer explained that since the inception of the US dollar, the stablecoin aims to be “the most transparent and trusted digital currency for the dollar.”

Terra’s Stablecoin depegging incident sheds light on the entire stablecoin economy

For a few years now, stablecoin assets have been a popular hedge among many participants in the crypto community. Recently, stablecoins are being lent in large numbers in order to collect interest and high returns. In the early days, stablecoins were centralized projects and these days there are few decentralized and algorithmic tokens among the giants.

Tether (USDT) and US Dollar (USDC) are the two largest stablecoin projects by market valuation. Both are centralized, which means that the company ensures that the stablecoins are redeemable for $1 by maintaining reserves that cover the money in circulation. Even before the Terra stablecoin depegging event, more confidence was placed in the two largest stablecoins because they are centralized.

Three days ago, News reported on the stablecoin shuffle after the latest editorial published by our news desk, stating that for the first time in history, three stablecoins entered the top ten cryptocurrency positions. That is still the case today, except that terrausd (UST) has been excluded from the top ten cryptocurrency market caps and BUSD has replaced the token position with stablecoin BUSD. Post-Earth Collapse (UST), CEO of Circle Financial Jeremy Aller He was talking to the press about what makes the USDC different, and believes that there should be a “more regulatory framework around stablecoins.”

Circle CEO says company is ramping up trust and transparency efforts, company says ‘USDC is always redeemable at a 1:1 ratio against the US dollar’

On Friday, Allaire tweeted that Circle was “stepping up our efforts” when it comes to the “trust and transparency” of the USDC. Allaire also shared a blog post written by the company’s chief financial officer, Jeremy Fox Jane, that provides a summary of what Allaire means about transparency. The Fox-Geen blog post explains that “USDC has always been backed by the equivalent value of US dollar-denominated assets.” The CFO further notes that the funds are owned by America’s leading financial institutions such as Bank of New York Mellon and BlackRock. The Circle Executive Report adds:

USDC reserves are held entirely in cash and short-term US government obligations, consisting of US Treasuries with maturities of 3 months or less.

Circle’s chief financial officer explained that the company publishes monthly testimonials from leading accounting firm Grant Thornton International. Fox-Geen summed up in the blog post: “USDC reserves are at least equal to the number of USDC in circulation, providing a reputable third-party guarantee of this fact to the USDC ecosystem.” “USDC can always be redeemed at a 1:1 ratio against the US dollar,” adds the department’s CEO. The blog post concludes that there are thousands of projects and entities that support and facilitate USDC exchange in 190 countries.

While the stablecoin Terra has shuddered, there are still a few decentralized tokens pegged to fiat, many crypto proponents believe they need

Meanwhile, there are quite a few decentralized and algorithmic stable assets out there today such as LUSD, DAI, FEI, MIM, USDV, and USDD. For example, the Ethereum-based Makerdao project uses an over-collateralization method to back the DAI stablecoin. Tron recently introduced an algorithmic stable token called USDD, and a blockchain project called Vader has a native algorithmic stablecoin called USDV. Another stablecoin origin, dubbed Magic Internet Money (MIM), is built on top of the avalanche (AVAX) and is issued by the decentralized lending platform Abracadabra.

Proponents of decentralized and algorithmic stablecoins believe that they are needed among central weights such as USDT and USDC. Proponents of this asset believe that centralized stablecoins are subject to the same failure, others believe that decentralized and algorithmic stablecoins are superior to centralized models because they cannot be frozen by the issuer. Despite these benefits, centralized stablecoins have dominated cryptocurrency users who, at least for the time being, have more confidence in them.

Tags in this story

Blog, Cash, Cash Reserves, CEO Circle, CFO of Circle, DAI, FEI, Pegged Tokens, Jeremy Allaire, Jeremy Fox Jane, LUSD, MIM, Report, Short Term Paper, Stable Coin Assets, Stable Coin Economy, Coins Stable, Stablecoins, Tether (USDT), Transparency, Treasuries, Trust, US Bonds, USDC, USDD, USDV

What do you think of centralized stablecoins and Circle’s recent blog post about transparency and token reserve support? Tell us what you think about it in the comments section below.

Jimmy Redman

Jamie Redman is the head of news at News and a technology financial journalist based in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open source code, and decentralized applications. Since September 2015, Redman has written more than 5,000 articles for News about the disruptive protocols emerging today.

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