Circle, the company behind the USDC stablecoin, has released a report indicating that the firm currently has 22,176,182,251 USDC coins in circulation. These coins are backed one-to-one with dollar assets worth $22,176,182,251.
Thus, the report validates the USDC coin is actually pegged at a 1:1 ratio to the dollar.
At the same time, the report reveals that USDC in circulation has grown by more than 2,600% since the beginning of 2021 with over 80% of all reserves being in cash and cash equivalents (deposit certificates and commercial papers).
The report comes barely a day from a meeting with the President’s Working Group on Financial Markets that seeks to fast tracking stablecoin regulations in the United States.
Circle CEO, Jeremy Allaire has published a blog post where he reinstates his firm’s commitment to transparency.
Indeed, as pioneers in the digital currency industry, Circle, together with Centre Consortium, have evolved a reserve management model that is more conservative and transparent than comparatively regulated digital payments systems and financial technology (FinTech) organizations.
– CEO, Circle
Circle is the firm behind USDC, the second largest stablecoin based on market valuation. The industry is coming under increasing scrutiny with both the Chinese and United States government issuing warnings in recent weeks.
A particular area of concern that governments have is that stablecoins may lack the financial assets that guarantee the coins the hold and distribute.
Tether, the leading stablecoin has been embroiled in a row with government authorities because of lack of clarity that it has adequate reserves to back all the coins it has in circulation.
Following these valid concerns, Circle has continued to publish independent reports which verify that the amount of coins it has in circulation are effectively backed by financial assets.
In his blog post, Jeremy Allaire used the opportunity to include the latest of these reports, as done by Grant Thornton, which is a global top ten accounting firm.
The report also provides a breakdown of the composition of assets that back USDC:
From this, it is clear that cash assets dominate USDC reserves (61%).
The Circle CEO reminds that the current regulatory regime does not require they provide such reports. It is not clear if self-regulation of this sort is adequate, hence why it will be interesting to see the nature of regulation that governments put in place.
Jeremy also says that he looks forward to more opportunities for disclosures around the business, as the company prepares to go public soon.
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