According to a recent blog post by the central Consortium, US dollar (USDC) coins will be covered in cash and US Treasury bills. The center was founded in 2018 by Circle and Coinbase, an American crypto exchange.
While Circle releases the USDC, the center controls which organizations can issue a stable coin and use the API. Visa, for example, announced in March that it would begin making calculations about transactions at the USDC.
Fixed coins are discarded as cryptocurrencies, which depend on the price of the Fiat currency. It is an important part of cryptocurrency markets as they give speculators access to a stable asset without the need to be recycled into fiat.
In this case, the USDC depends on the US dollar. The center also noted that these stable coins can be exchanged at a 1: 1 per dollar ratio they follow.
However, that 1-1 support was attacked in July as Circle showed the stable coin was secured with just 61% cash and cash equivalents. Cash in this context can also be money market funds, and their equivalents are short-term securities.
Breakdown of Circle reserves by USDC in July. Source: Circle
“Conscious of the community mood, our commitment to trust and transparency, and the changing regulatory framework, Circle announced that with the support of the center and Coinbase, it will keep its USDC Reserve in all-cash and short-term U.S. Treasuries,” it said in a Sunday blog post.
Can Circle win battles for stable coins?
The company said those updates would not be reflected in current support disclosures but in future assessments carried out by auditors Grant Thornton.
Stable coins under attack
Currently, Stablecoin Circle has a total market capitalization of $ 27.01 billion, according to CoinGecko, making it the ninth largest cryptocurrency.
The largest stable coin is the USDT tether, with a market capitalization of more than $ 65 billion.
Earlier this month, Tether also produced a similar assurance report outlining its support. Report showed cash and bank deposits were stablecoin
