2021-7-21 20:55 |
Circle, the issuer of USDC, released its reserve account report on Tuesday.
With a market cap of nearly $26.9 billion, USDC is the second-largest stablecoin capturing 23.57% of the stablecoin market share, up from 9.15% a year back. This year alone, USDC in circulation has grown by over 2,600%.
Launched three years ago, Circle aims to prioritize trust, transparency, and accountability. This includes ensuring the total circulation of USDC remains backed on a 1:1 basis with dollar-denominated assets, it said.
The independent accountant report by Grant Thornton showed its reserve breakdown with 61% of its USDC backed by cash and cash equivalents.
Here, cash includes deposits at banks and Government Obligation Money Market Funds; cash equivalents are securities with an original maturity less than or equal to 90 days in accordance with generally accepted accounting principles.
By comparison, Tether disclosed in May that 75.85% of the USDT is backed by Cash & Cash Equivalents & Other Short-Term Deposits & Commercial Paper, whose further breakdown revealed cash making up 3.87% of it.
Oh wow. If there is a term that #crypto learned this year it is: commercial paper. Now reinforced by the second stablecoin by size. Good we finally settled this and glad to see others following in #Tether 's steps in providing reserve breakdowns. Tether truthers in disbelief …
— Paolo Ardoino (@paoloardoino) July 20, 2021
Coming back to USDC, Yankee CDs, USD denominated Certificates of Deposit issued in the US having maximum maturity for 13 months, and US Treasuries with a maximum maturity of 3 years make up for just over 10% share each in backing reserves.
Commercial paper and Corporate bonds that involve unsecured debt obligations of corporations and financial institutions with a maturity between 91 days and 13 months and up to 3 years respectively account for 9% and 5% share.
“Overall portfolio maintains an average credit rating of A or better on S&P scale and weighted average maturity of less than or equal to 1.5 years,” stated Circle.
While public disclosure is not currently a regulatory requirement for stablecoins or privately issued digital currencies, Circle said it wants to lead with greater transparency ahead of becoming a public company.
As we reported, Circle shared a couple of weeks back that it is going public via SPAC at a $4.5 billion valuation.
In its announcement, Circle said it also welcomes the work being undertaken by the President’s Working Group on stablecoins. On Monday, Treasury secretary Janet Yellen met with the group and urged the regulators for “quick” action on rules to regulate stablecoins.
The post 61% of USDC Reserves in Cash and Cash Equivalents, Reveals Circle’s Transparency Report first appeared on BitcoinExchangeGuide.Similar to Notcoin - TapSwap on Solana Airdrops In 2024
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