Circle reveals its reserves which back USDC stablecoin

    17 Jul 2022

    Circle Internet Financial released a detailed yet unaudited breakdown of its reserve assets for the firm’s USD Coin (USDC), showing $42.1 billion in short-term US government bonds and $13.6 billion in cash. Lately, crypto firms and their finances are under increasing scrutiny in the ongoing crypto credit crisis.

    Published in the company’s blog post on Thursday, the asset breakdown shows that as of June 30, Circle held $42.1 billion of US Treasury bonds with an average maturity of 44 days, with the latest expiry date being September 29. A bond is considered to be short-term when its maturity is less than three months. The document also listed the bonds’ individual identifier, the so-called CUSIP number.

    Also, the document said that Circle held $13.6 billion in cash at US-regulated financial institutions, namely at the Bank of New York Mellon, Citizens Trust Bank, Customers Bank, New York Community Bank, Signature Bank, Silicon Valley Bank, Silvergate Bank, and US Bancorp.

    Supposing USDC holds a 1:1 peg to the US dollar, the $55.7 billion in assets Circle claims is slightly higher than the 55.4 billion USDC tokens in circulation.

    “While US policymakers work to enact federal regulations for stablecoins, Circle continues to increase our transparency based on new industry innovations and what USDC holders within our ecosystem would like to see,” Circle CFO Jeremy Fox-Geen said in the post.

    According to the document, the report was not audited, but it offered a more detailed glimpse into the reserve assets backing the stablecoin, the second largest by market cap and with a circulating supply of $55 billion.

    Circle’s report comes amid an ongoing liquidity crunch in the crypto markets, kick-started by the multibillion-dollar implosion of the Terra blockchain in May as the 3rd-largest stablecoin de-pegged from the US dollar. Crypto firms’ finances are under increasing scrutiny, with various crypto lenders and investment firms facing liquidity problems and applying for bankruptcy protection.

    Although stablecoins are supposed to be anchored to some asset like the dollar, several stablecoins lost their price peg after the Terra implosion, including Tron’s USDD and Neutrino USD (USDN). The price peg of Tether’s USDT, the largest stablecoin with a $66 billion market capitalization, also briefly wobbled.

    According to data by crypto market data tracker CoinGecko, USDT had $17 billion in redemptions since May, while USDC grew by $7 billion over the same period, as holders flocked to the perceived safer asset.

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