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- Coinbase and Circle has been criticized by Bloomberg for altering their USDC policies
- Bloomberg noted some significant change in Coinbase’s policy regarding USDC
- Previously it was mentioned that the USDC has been backed by dollars which have been changed to dollars or its equivalent assets
- The crypto exchange revealed that the stablecoin is backed by a list of sanctioned investments
Coinbase is one of the leading cryptocurrency exchanges platforms globally. In contrast, Circle is another crypto firm that intends to become the world’s first full-reserve nation commercial digital currency bank. Recently, both the firms have been criticized by Bloomberg, the media firm, over an alteration of policy doubting USDC, the United States dollar-pegged stablecoin. However, it is worthy to note that the actual banking policies of such crypto tokens are more complex than the criticism signifies.
Coinbase and Circle altered their USDC policy
Bloomberg has recently drawn its attention to past and present statements mentioned on the website of the crypto assets exchanges. Following the statements, the media firm criticized both Coinbase and Circle.
As previously reported, Coinbase’s official website mentioned that each USD Coin or USDC is backed by $1. And such backed funds are held in a bank account. However, now the statement has been changed, and the website stretched it for the inclusion of cash equivalents. Indeed, now the tokens are backed with $1 or assets equivalent to such values held by US institutions.
Coinbase’s alteration follows Circle’s July disclosure
It has been observed that the recent alteration in Coinbase’s policy regarding the stablecoin is seemingly related to a disclosure made by Circle in July. The crypto firm, which is one of the Coinbase partners, revealed a breakdown of its USDC reserves. The July disclosure document suggested that 61% of the reserves backing the stable crypto token were in cash and cash equivalents. Such equivalents include certificates of deposits, United States treasuries, various bonds, and commercial notes.
USDC is backed with several sanctioned investments
Following the criticism, Coinbase released an official statement. The report highlighted that the stablecoin is known to be backed with several sanctioned investments. In which the stable crypto token can be invested as allowed by state regulators.
Notably, though the exchange has altered the stable coin policy on its website, it never promised and never-changing method of backing.
