USD Coin (USDC), a cryptocurrency stablecoin, will now have its reserves consolidated into cash and U.S. government treasuries. This announcement was made by Coinbase President and COO, Emilie Choi.
In a blogpost from the Centre Consortium, the cryptocurrency that was collaboratively created by top U.S. crypto exchange Coinbase and blockchain financial services company Circle, stated that USD Coin’s reserves will soon be entirely held in “cash and short duration U.S. Treasuries.”
“These changes are being implemented expeditiously and will be reflected in future attestations by Grant Thornton,” the blogpost stated further.
On Twitter, Emilie Choi attributed the change in policy to backlash against USDC’s reserves expanding beyond cash, cash equivalents and U.S. Treasuries in May. The changes to USDC’s reserves had not been reported until July, intensifying public concern regarding the stablecoin’s backing. She concluded, stating that the new policy will be in effect by September, noting that USDC’s next two attestation reports continue to show a diversified portfolio for the stable token’s reserves.
Last month’s USDC attestation report for May revealed that the currency was backed 61% by cash and cash equivalents, 12% by U.S. treasuries, 13% by Certificates of Deposit denominated in U.S. dollars, 9% by commercial paper, 5% by corporate bonds accounted and 0.2% by Municipal bonds.
What you should know
USDC is the second most valuable stablecoin that is pegged to the U.S. dollar on a 1:1 basis, with a market capitalization of approximately $27 billion. It is only surpassed by Tether’s USDT, which has a market capitalization of $65 billion.
Since its launch in September 2018, USD Coin has grown and expanded across five different blockchains. In June, Centre announced plans for USDC to launch across 10 blockchain networks.
