Coinbase and Circle establishment CENTRE Consortium announced on the 22nd that USD Coin will only be backed by cash and short term-US treasury bills as part of its commitment to transparency and trust. The blog post indicated that they would gradually start migrating supporting assets from September of this year.
In data published by the company in late July, circle revealed the percentage of underlying assets of its stablecoin USDC. They were held under the following proportions:
Cash and cash equivalents: 61%
Certificate of deposit: 13%
US Treasuries: 12%
Commercial paper: 9%
Corporate bonds: 5%
Municipal and agency bonds: 0.2%
The data was audited by major accounting firm Grant Thornton. It was the first time Circle revealed its currency’s backed assets. The report arose controversy since Coinbase had listed the currency as a stablecoin with US dollars as collateral assets at a ratio of 1:1. However, the report revealed that over 39% of the stablecoins were not backed by the US Dollar.
Fully cash-backed stablecoin
After the controversy, the company has now announced that USDC would soon become a complete dollar-backed stablecoin. The announcement read:
“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 US Treasuries. These changes are being implemented expeditiously and will be reflected in future attestations by Grant Thornton.”