Cryptocurrency exchange Coinbase and network Centre are collaborating to support Circle’s USD Coin, which is now backed by cash and short-term U.S. Treasuries, according to a Centre blog post and multiple news reports.
“This is the approach we want,” Coinbase President and Chief Operating Officer Emilie Choi said in a tweet thread.
1/ Quick update on USDC. Starting September 2021, USDC reserves will be held in cash and short-duration US government treasuries. This is the approach we want for USDC reserves. https://t.co/29liaGg2LA
— Emilie Choi (@emiliemc) August 23, 2021
USDC is the largest stablecoin, with roughly $28 billion in market capitalization. Each coin is backed by about $1 in reserves, according to the blog post.
“Mindful of community sentiment, our commitment to trust and transparency, and an evolving regulatory landscape, Circle, with the support of Centre and Coinbase, has announced that it will now hold the USDC reserve entirely in cash and short-duration U.S. Treasuries,” Centre said in the blog post. “These changes are being implemented expeditiously and will be reflected in future attestations by Grant Thornton.”
The open-source USDC project aligns within the boundaries of transmission rules and regulations in the U.S., according to the release. The stablecoin uses legacy financial institutions (FIs) and auditors and operates across blockchain technology.
Cryptocurrency and blockchain technology are continually seeing USDC as having an advantage over other digital currencies, according to CNBC. Moreover, USDC is viewed as not just a digital dollar currency, but also as an electronic means to transact and store value.
With $27 billion worth of eCurrency circulated worldwide, USD Coin is now the second-largest stablecoin around the globe, per CNBC. Tether has the widest circulation, with $75 billion.