- Circle has joined Tether and published details about its asset reserves
- The firm’s goal is to become more transparent
- Will increase public accountability and also elevate trust in Circle and USDC
U.S. Dollars back a majority of Circle’s USDC stable coin, the company disclosed on Tuesday. Crypto’s Number 2 Stable currency is backed by cash or cash equivalents amounting to 61%. USDC is a dollar-backed stable coin helmed by Circle- and Coinbase-led CENTRE Consortium.
In its latest attestation report, dated July 16, 2021, Circle published a breakdown of its assets backing the stablecoin for the first time. The report revealed that 61% of its tokens are backed by “cash and cash equivalents,” meaning cash and money market funds.
13% stablecoins are backed by Yankee Certificates of Deposit – meaning C.D.s issued by foreign (non-U.S.) banks. In comparison, U.S. treasuries account for 12%, commercial paper accounts for 9%, and municipal and corporate bonds back the remaining tokens.
Circle has currently released about $22.2 billion worth of USDC, according to the attestation. Circle intends to go public later in 2021 in a SPAC deal valuing the firm at $4.5 billion.
According to the footnotes, Tuesday’s attestation reveals that the commercial paper has a “minimum S&P rating of S/T A1. In other words, S&P Global Ratings regards the issuer’s ability to meet its financial obligations as being strong.
Circle has joined Tether and published details about its asset reserves
Circle has joined Tether and published details about its asset reserves. The publishing of more information will rest on questions about whether or not its stablecoin is fully backed. Tether also uses commercial paper to support its USDT (-0.03%) token, though commercial paper accounts for far more of Tether’s reserves than Circle’s.
The attestation report reveals that cash includes deposits at banks and Government Obligation Money Market Funds. Cash Equivalents are defined as securities with an original maturity less than or equal to 90 days following generally accepted accounting principles.
Attestation is a part of the firm’s goal to become more transparent
Circle CEO Jeremy Allaire said that the new attestation is a part of the firm’s goal to become more transparent ahead of its previously reported SPAC to go public. The journey towards becoming a public undertaking allows better transparency, accountability.
The journey to becoming a public company will afford the company more significant opportunities for revealing the broader business and operations. It will increase public accountability and elevate trust in Circle, USDC, and companies building on the standards and market infrastructure we have been delivering over the past several years.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.