Reassure the public first – The publication of the official reserves of theUSDC does it have a distant relationship with the scandal of the pseudo stablecoin UST ? Evil tongues will surely see a cause and effect link. We just ask the question. Waiting, Circle has just made public a document detailing the state of its financial reserves as well as their distribution. And just a few weeks later wild rumors about the fragility of its stablecoin, reassuring the world of finance and investors seems indeed in good order. Let’s go to Boston, Massachusetts, to do some accounting!
An obvious need to reassure the general public and the regulator
Last June, the company Circle published a series of articles on its blog presenting its new communication strategy. It refers to an obvious need for transparency and confidence to find.
“In our first article in this series (…) we reiterated our longstanding commitment to building trust through transparency and began sharing weekly data for the USD Coin (USDC). In addition, we will continue to improve our communication. »
Statement from Circle
The CFO (financial director) of the group, Jeremy Fox-Geencommits to a maximum clarity to try by all means to guarantee the sustainability of his business, even if it means sometimes doing a little too much. Read instead:
“Circle’s disclosures go beyond what is required by existing financial regulations. In addition to our audits and attestations, we recently began publishing weekly data on the size and composition of USDC reserves (…). We have repeatedly urged policymakers and regulators to require regular reporting on stablecoin issuers, and we are committed to finding other ways to improve transparency. »
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US treasury bills and cash in reserve
At least the group has kept its word and gives us the composition of its financial reserves. Go on ! Let’s dive into the numbers together. At June 30thCircle’s reserves amount to 55.7 billion of dollars. This sum is distributed mainly over 2 separate lines.
There are 42.12 billions of dollars short-term US treasury bills as well as 13.58 billions of dollars in cash held in regulated financial institutions in the country. Jeremy Fox-Geen clarifies that this reserve is “entirely separate from Circle’s operations”.
This implementation policy compliance and communication seems to be paying off for Circle, as its stablecoin moves up the category rankings. Additionally, according to ConsenSys, USDC’s growth is tied to “a positive perception of the market” that Circle and the Coinbase crypto platform “will issue USDC appropriately”.
The stablecoins in dollar always have the rating among crypto enthusiasts, and Circle knows that it has a big shot to play against its most serious competitor: Tether and its USDT. But other stable currencies appear in the 4 corners of the world and threaten the king dollar. The euro, the pound sterling or the digital yuan could quickly grab market share and compete with its current supremacy.
Stablecoins disturb central banks. So what ? Do you have to wait for their green light to stock up on USDC? Register now on the LiteBit regulated platformyou will receive €20 as a welcome gift (affiliate link).