Circle reserves no longer contain US Treasuries that mature after June News ▸ US ▸ Stablecoins
Circle reserves no longer contain US Treasuries that mature after June
CEO Jeremy Allaire said that this protects Circle against a U.S. debt default.
1 min read
Updated: Jul. 13, 2023 at 2:45 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Circle CEO Jeremy Allaire said in a statement to Politico on May 10 that his stablecoin firm no longer holds long-term U.S. Treasuries.
Specifically, Circle does not hold Treasuries that mature later than June 2023. Allaire explained the company’s reasoning by stating:
“We don’t want to carry exposure through a potential breach of the ability of the U.S. government to pay its debts.”
The Circle CEO’s comments come after statements made by U.S. Treasury Secretary Janet Yellen. Yellen recently said that the U.S. government could be unable to pay its bills by June 1 and could default on its debt at a later date, leading to widespread public concern.
Circle backs its USDC stablecoin with a variety of assets, including cash, cash equivalents, and Treasuries. According to data from January, about 65% of Circle’s USDC reserves were made up of Treasury bills, meaning that a significant amount of its reserves could have been affected by a default.
The news comes alongside reports from Tether, which revealed today that its USDT stablecoin is backed by $1.5 billion of Bitcoin as well as previously disclosed assets.
Tether’s USDT and Circle’s USDC are the two largest stablecoins in circulation, with market caps of $82.6 billion and $30.1 billion, respectively.
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Mike Dalton
Before transitioning to crypto writing in 2018, Mike studied library and information sciences. Currently, he resides on Canada's West Coast.
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USD Coin (USDC) is a stablecoin fully backed by the US dollar and developed by the CENTRE consortium.
Circle
Circle Internet Financial Ltd is a global internet finance company, built on blockchain technology and powered by crypto assets.
