2023-5-11 17:07 |
Coinspeaker
Circle Adjusting Its USDC Reserves for Avoiding US Default Risks
In a recent development, USDC stablecoin issuer Circle has reported that it has recently adjusted its reserve treasury in order to avoid the risks of US debt defaults. On Wednesday, May 10, Circle CEO Jeremy Allaire appraised the same stating that the firm has adjusted the mix of reserves backing the stablecoin USDC by switching to shirt-dated US Treasurys.
Allaire stated that Circle now no longer holds Treasurys maturing beyond early June since they don’t want to carry exposure “through a potential breach of the ability of the US government to pay its debts”.
“We don’t want to carry exposure through a potential breach of the ability of the US government to pay its debts,” said Allaire. As per the disclosure coming from Circle Reserve Fund, which is managed by BlackRock, the current US Treasury holdings by Circle don’t mature beyond May 31.
Circle’s USDC stablecoin is still the second-largest stablecoin with a market cap of $30 billion. Earlier this week, US Treasury Secretary Janet Yellen said that the Biden government will be forced to take a decision if Congress doesn’t come to a common ground on increasing the debt ceiling.
Currently, the Biden administration and the Republicans are in a conflict over raising the $31.4 trillion borrowing limit. The US is currently very close to a default on its debt. Thus, failing to raise the debt ceiling could cause havoc in the global financial system.
Tether vs CircleAmid the current banking crisis in the United States, stablecoin issuers like Tether and Circle have been moving their reserves to the safest instrument i.e. US Treasury. In its recent report, Tether noted that they have also moved a majority of their reserves to US Treasury.
Circle has passed through turbulent times this year so far with the USDC stablecoin losing its peg earlier in March 2023. This led to major withdrawals from the USD Coin with its market cap dropping by more than 25% just over the last month. Despite this, USDC is currently the second-largest stablecoin with a market cap of $30 billion.
Over the last year, the USDC supply in the market has dropped by 46%. Last month in April Circle CEO Jeremy Allaire blamed the current banking crisis and the SEC’s war on crypto for USDC’s shrinking market cap.
nextCircle Adjusting Its USDC Reserves for Avoiding US Default Risks
Similar to Notcoin - Blum - Airdrops In 2024
USCoin (USDC) на Currencies.ru
|
