As adoption of USDC continues to expand, it has been announced that all USDC reserves will be stored in cash and US bonds.
Coinbase president and COO Emilie Choi announced on Twitter that as of September 1, all reserves backing USDC, the second-largest stablecoin, will be stored in cash and US treasury bills.
A press release was shared from the website of Centre, one of the companies that created the USDC.
Strategy Change for USDC Reserves
Choi tweeted that the USD reserves that bring back USD Coin (USDC) within a week will be stored in cash and short-term US government bonds, and this is the approach the issuers (Coinbase, Center and Circle) want for all USDC. The currency will still be supported at a 1:1 ratio.
Choi says that the changes in the investment portfolio of the second most popular stablecoin will not end in September and will diversify further in the future.
USDC is the largest regulated stablecoin in the world. Currently, its market capitalization totals $27,007,704,394 and ranks ninth on the CoinMarketCap cryptocurrencies scale. Meanwhile, Tether’s USDT ranks fifth with almost three times as much capital: $64,871,751,926.
According to the press release, USDC reserves are invested in accordance with the investment rules permitted by state money transfer regulations and are guided by the Center’s Reserve Management Policy.
Funds backing USDC went beyond cash and equivalents in May of this year, and in July Circle released a report detailing this. However, following community sentiment demanding greater transparency, Circle, Center, and Coinbase will switch to holding USDC reserves only in cash and short-term US Treasury bonds. The press release states that USDC issuers are thus responding to the backlash from cryptocurrency users, developer teams, and stakeholders who want more transparency and greater collaboration with the community.