Circle, the company behind USDC stablecoins, is in its best financial position yet, according to CEO Jeremy Allaire. Circle’s CEO, Jeremy Allaire, sought to dispel rumors that its USDC stablecoin was on the verge of collapse.
Allaire posted a tweet thread over the weekend saying that he understood why the crypto community would be “paranoid” about USDC after considering the recent collapses of prominent crypto projects.
Circle boss said that Circle is now in its strongest financial position ever and will increase transparency.
Allaire shared Circle’s latest reports on transparency, trust and audits, attestations as well as the state USDC’s liquidity.
Circle’s CEO comments are amid rumors suggesting that the firm could default on USDC reserves because of the large interest payments it must make to crypto-centric banks such as Signature and Silvergate.
Stablecoin can also be used to lend in transactions involving Genesis BlockFi, Celsius and Galaxy (3AC). Each of these firms was caught in a liquidity crisis which has rippled throughout the industry.
These rumors seem to have been addressed head-on by Allaire explaining the difference between USDC’s actual USDC and USDC’s reserves.
Allaire wrote that there is also confusion between USDC reserves. These are regulated (where and how we can keep it), checked (by regulators, assurance firms), transparent (weekly flows & composition), and transparent — but USDC itself is used in lending market markets, away From Circle.”
He said that Circle would publish a blog on Circle Yield this week. The company’s short and long-term yield rate product is built entirely on USDC stablecoin. He stressed that the product is both regulated as well as over-collateralized and that it is only available to accredited investors with whom Circle had “zero issues.”
USDC Reserves
Circle, which plans to list via a special purpose acquisition corporation (SPAC), was valued at $9 billion in February of this year. The Boston-based company publishes monthly statements on the size and composition the USDC reserve in addition to its annual audits.
USDC stablecoin has the second largest market capitalization in crypto markets, at $55.8billion. This is nearly doubled over the last year, and only $10 billion behind market leader Tether (USDT).
Circle claims that USDC stablecoin is “always redeemable 1 to 1 for US dollars.” Any amount. Always. “Period,” stated the firm in its most recent liquidity statement.
The statement stated that USDC was fully reserved with US Treasuries (80%), and cash (20%) and is held directly with top US financial institutions and custodians based within the US regulatory framework.
Tether is a rival that uses different assets–U.S. Circle stated that USDC reserves don’t contain any other high-risk assets like digital assets, U.S. commercial paper, or certificates of deposit from financial institutions. Circle also mentioned Tether, which uses different types of assets–U.S. Treasury bills, corporate commercial paper, and certificates for deposit issued by financial institution–to back its stablecoin.
