For Circle, stablecoins have an obligation to be transparent and trustworthy.
After collapse of Earth and its algorithmic stablecoin, Circle's chief financial officer Jeremy Fox-Geen published an article on the company's official blog, titled “How to be stable” in which he explains that, since the creation of USDC, the stablecoin aims to be “The most transparent and reliable digital dollar currency".
Stablecoins have long since become a kind of hedging asset for cryptocurrency investors. Recently, they have also become lending vehicles for generating high-yield returns. Originally, stablecoins were centralized projects, however, projects have begun to appear decentralized and algorithmic.
Following the collapse of $UST, Circle's USDC and Tether's USDT are the two largest stablecoin projects by market cap. Both projects are centralized, ensuring that each stablecoin can be redeemed for $1, as fiat reserves are always maintained to cover the funds in circulation.
Circle defends in your article the main differences between USDC and other stablecoins, as well as the need to create a regulatory framework for stablecoins.
Fox-Geen and other Circle members say they have redoubled efforts to improve trust and transparency of its stablecoinThe blog post explains that USDC has always been backed by the equivalent value of assets denominated in US dollars. Furthermore, these backing funds are held by major US financial institutions such as the Bank of New York Mellon or BlackRock.
Reserves supporting USDC's peg to the dollar are kept entirely in cash, as well as US Treasury bonds with a maturity of 3 months or less.
On the other hand, to keep a stablecoin alive, the investor and user confidence. To this end, since 2018, Circle has been publishing monthly reports transparency certificates, issued by accounting firm Grant Thornton International, showing that its reserve is worth the same as the USDC in circulation.
Similarly, Circle and its USDC reserve undergo annual auditsThe latest audits, corresponding to the 2020 and 2021 financial years, have been submitted to the SEC as part of the documentation required to become a listed company on the New York Stock Exchange.
Finally, Circle officials assure that USDC users They will always be able to exchange their stablecoins for a dollar, either through their Circle accounts or on any of the exchanges where it is available.
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