Circle USDC Issuer Disclosed Reserves, Proves Its Liquidity

The Circle USDC issuer disclosed their reserves and proved that the company is actually liquid and showed that its stablecoin is fully backed by physical dollars as we can see more today in our latest Circle news.

After the collapse of the Terra ecosystem which included the crash of LUNA and UST stablecoin, the crypto community started becoming more cautious about stablecoins that pushing the stablecoins like USDC and USDT to be more transparent about their finances. The circle Internet Financial released the first monthly report of the Circle USDC issuer reserve assets that are held in storage as of June 30, the company also shwoed that the USDC reserve is held in cash and 3-month US treasuries. This is very important because it proves that it has enough liqudity to return the assets in a short period of time in case of a panic attack or a negative event of any kind.

Circle continues enhancing our transparency and today we shared a detailed look at the assets backing the USDC reserve. https://t.co/1tuaFWZhIO

— Circle (@circlepay) July 14, 2022

When a coin is not backed properly, the pressure from the clients that try to withdraw their funds and move to a trustworthy asset can lead to an effect that will end up in a collapse, and a lack of liquidity can heavily affect the investment strategies of the affected parties. According to the circle report, the total reserves are $55.7 million divided into two parts. The amount is on par with the USDC market cap data while Circle also provided a list of USDC reserve custodians.

The Chief Financial officer at Circle Jeremy Fox Geen said that in the company’s statement from 2018, Circle obtained plenty of certifications from third-party accounting companies on the adequacy of the reserves and the composition so Circle made sure to comply with the audits required by the regulators along with the recommendations:

“Circle’s audits contained within our public SEC filings are available here. Audits and attestations serve different purposes that are discussed in this blog, How to Build Trust.“

Circle and Tether also continued to work their way through regulators and launch a new stablecoin that is on parity with other currencies as is the case with EUROC which is a new stablecoin backed by the euro and Tether’s stablecoin pegged with the Brazilian real. The stablecoin projects became more transparent after de-pegging a few tokens and the most prominent example was UST which dropped to less than 10 cents in a few days.

Assurance Opinion Once Again Re-affirms Tether’s Reserves Fully Backed; Reveals Significant Reductions in Commercial Paper and Increase in U.S. Treasury Bills https://t.co/8qVSQFQBeY

— Tether (@Tether_to) May 19, 2022

Something similar happened with USDT which lost parity against the dollar for a few days and Tether Limited said in mid-May that it was working to reduce the amount of commercial paper that is held to $3.5 billion which is a huge amount considering that by the end of 2021, the company had billion in reserves.
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