61% of USDC coins are held in the form of cash

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Circle, the issuer of the USD Coin (USDC) stablecoin revealed that the bulk of USDC reserves are held in the form of liquid assets.

Circle, the issuer of the stablecoin USDC, revealed that most of the stablecoin reserves are held in liquid assets. Diest announced Jeremy Allaire, managing director of the company, in a blog post yesterday.

According to the blog post, Circle has established some rules to ensure that all of USDC’s supply in circulation remains covered on a 1:1 basis with US dollar denominated assets.  The company’s audit report shows that 61% of USDC reserves are covered by cash and cash equivalents.

Liquid assets include deposits with banks and government-guaranteed money market funds,“ the report continued. “Cash and cash equivalents are defined as securities with an original maturity of not more than 90 days in accordance with generally accepted accounting principles (US GAAP)..“

In addition, 13% of the reserves are held in Yankee Certificate of Deposits (a savings vehicle marketed to larger investors and issued by foreign banks trying to obtain capital from US depositors).

The remaining reserves are held in US Treasuries (12 %), money market securities (9 %), corporate bonds (5 %) and municipal bonds and US agencies (0.2%). This brings the total to $ 22 billion. However, at the time of this report, the total market capitalization of the USDC is just over $ 26 billion.

According to Allaire, the new audit report is part of the company’s goal to become a publicly traded company through SPAC. The transparency report is therefore necessary. „As we move forward to becoming a publicly traded company, we increasingly have the opportunity to ensure greater transparency and accountability with respect to our entire business and activitieshe continued.

Circle’s desire for transparency is necessary because Tether, the issuer of USDT stablecoin, has faced numerous controversies in recent years. Tether has been accused of minting and launching USDT tokens without having the cash reserves that support these tokens.