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USDC Reserves to Expand from Cash to US Treasuries

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Mon, 08/23/2021 - 10:35
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Yuri Molchan
As the adoption of USDC keeps expanding, its emitters announce that they will store all USDC reserves in cash and U.S. Treasury
USDC Reserves to Expand from Cash to US Treasuries
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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.

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.

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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.

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About the author

Yuri is a crypto journalist interested in technology and technical innovations. He has been in crypto since 2017. Believes that blockchain and cryptocurrencies have a potential to transform the world in the future in many of its aspects. ‘Hodls’ major cryptocurrencies and has written for multiple crypto media outlets. 

His articles have been quoted by such crypto influencers as Tyler Winklevoss, John McAfee, CZ Binance, Max Keiser, etc.

Currently Yuri is a news writer at U.Today and can be contacted at yuri.molchan@u.today.