USDC Reserves Will Be Consolidated Into Cash and U.S. Government Treasuries
From September, all USD Coin reserves will be consolidated into cash and the U.S. government treasuries.
Coinbase President and Chief Operating Officer Emily Choi explained that the policy change is due to the backlash against the USDC reserves that went beyond cash, cash equivalents and US Treasury bonds in May this year. Since these changes in USDC reserves were not reported until July, this has heightened public concerns about securing a stable coin.
Choi stressed that the new policy will take effect by September, noting that the next two USDC attestation reports still show a diversified portfolio of stable token reserves.
USDC’s attestation report for May showed that the currency was backed 61% by “cash and cash equivalents” and 12% by US Treasury bonds.
Certificates of deposit denominated in US dollars accounted for 13% of token support, while commercial paper accounted for 9% and corporate bonds accounted for 5%. Municipal bonds also accounted for 0.2% of the stable coin collateral.
Since launching in September 2018, USD Coin has grown to nearly $28 billion in market cap and expanded across five different blockchains.