The center, a consortium that includes Circle and Coinbase, announced in July that USDC support was not just monetary, and that it had not lasted more than a year. But he has now announced that from September all support will be in cash and short-term Treasury bonds. Will the central model of stable coins succeed in the future?
Until recently, the USDC was said to have dollar-to-dollar support, as opposed to the TETHER USDT, which could be said to have had fairly weak progress on its support. The Coinbase website announced that the currency denominated in US dollars is fully supported by the dollar in its “bank account,” as stated in the August 23 Bloomberg article.
The article also notes that the description changed later when contacted by Bloomberg. Coinbase President Emily Choi later publicly admitted on Twitter that the support company’s statement to the USDC “may have been more explicit.”
Circle’s thirst for profit can be said to have put its customers ‘ need for a stable coin that is safe and risk-free. Aaron Tilton, CEO of smartFI and former state legislator, said:
“This circle story is a case of them not being able to pull their hands out of the cookie jar and get caught. Circle stablecoin’s business model is based on a profit motive that does not meet the needs of its customers. With all the stable Cefi coins available, there is an intrinsically contradictory reason for making a profit; they need to use reserves to increase profits, which means more risk, not less.”
Tilton continues to decry periodic audits as inadequate because the December time gap between them could leave a lot of room for the company to adapt its business model to profit rather than to the needs of low-risk customers.
George Zarya, chief executive of the Bequant exchange, believes the shift in how circle supports the USDC is a result of its continued focus on Tether (USDT). The possibility of placing USDC on the NYSE is also being considered.
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