USDC issuer to shift reserves into cash and U.S. Treasuries

The USD Coin (USDC) reserves from the Centre consortium, which includes Circle and Coinbase, will consist solely of cash and U.S. Treasury bills.

1/ Quick update on USDC. Starting September 2021, USDC reserves will be held in cash and short-duration US government treasuries. This is the approach we want for USDC reserves. https://t.co/29liaGg2LA

— Emilie Choi (@emiliemc) August 23, 2021

According to attestation report for May, 61% of the reserves backing USDC issuance of $22.2 billion were cash and cash equivalents.

13% of the reserves were allocated to certificates of deposit, 12% to U.S. Treasury securities with maturities of more than three months. The remainder was invested in commercial paper, corporate and municipal bonds.

According to Coinbase’s chief operating officer Emilie Choi, the changes will take effect at the end of September. The attestation reports for June and July will not reflect the transition to a more conservative investment profile.

7/ So to be clear, the next 2 attestation reports (June and July) for USDC reserves will show a diversified investment portfolio. This will reverse beginning with the month of August.

— Emilie Choi (@emiliemc) August 23, 2021

The senior executive admitted responsibility for the incorrect statement on Coinbase’s site that each USDC was backed by “$1 in a bank account”. Going forward, the cryptocurrency exchange updated the definition of the stablecoin.

4/ When Circle shared their May report about USDC reserves in late July (which included a more diversified pool of investments for the first time) we should have moved faster to update statements like that on our website. That was a mistake and Coinbase takes ownership for that.

— Emilie Choi (@emiliemc) August 23, 2021

Currently the wording reads: each USDC is backed by $1 or an asset with a fair value equal to that amount, held in accounts at U.S.-regulated financial institutions.

Earlier, one of the USDC issuers, Circle will become «коммерческим криптовалютным банком с Fed, the U.S. Treasury, OCC and FDIC.

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