Coinbase president and COO Emilie Choi has taken to Twitter to announce that, as of Sept. 1, all reserves that back the second- largest stablecoin, USDC, will be stored in cash and U.S. Treasury bonds.
She shared a press release from the website of one of the companies that created USDC, Centre.
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
Change in strategy for USDC reserves
Choi tweeted that, in a week's time, USD reserves that back USD Coin (USDC) will be stored in cash and short-duration U.S. government Treasury bonds, and this is the approach the emitters—Coinbase, Centre and Circle—want for all USDC reserves. The currency will still be backed at a 1:1 ratio.
She says that the changes in the investment portfolio of the second most popular stablecoin will not finish in September and will be more diversified in the future.
USDC is the largest regulated stablecoin in the world. Its market capitalization value at the moment totals $27,007,704,394, and it is ranked nine on the CoinMarketCap cryptocurrencies scale.
Meanwhile, Tether's USDT remains in fifth place with a capitalization of almost three times more: $64,871,751,926.
USDC community requires more transparency
According to the press release, USDC reserves are invested in accordance with investment rules allowed by state money transmission regulations and are made under the guidance of Centre's Reserve Management Policy.
The funds backing USDC went beyond cash and its equivalents in May of this year, and in July, Circle published a report detailing that. However, following the sentiment of the community that demanded greater transparency, Circle, Centre and Coinbase will switch to holding USDC reserves only in cash and in short-duration U.S. Treasury bonds.
The press release states that USDC emitters are thus responding to the reaction of the coin users, its dev teams and stakeholders who want more transparency and more collaboration with the community.
USDC to launch on new blockchains soon
At the moment, USDC is utilized by major regulated crypto exchanges and on DeFi apps. People are actively using it for payments via a number of apps that are constantly growing.
USDC runs on five blockchains, including Ethereum, and will soon launch on a few more networks.