Hassan Maishera
Stablecoin issuer Center wants to hold all its USDC reserves in cash and US treasuries moving forward.
Center to convert all USDC reserves into cash and treasuries
Center, the company behind the USDC stablecoin, has revealed that it intends to hold all its USDC reserves in cash and US treasuries. The company made this known in a blog post earlier today in a bid to boost its transparency.
The company said, “Mindful of community sentiment, our commitment to trust and transparency, and an evolving regulatory landscape, Center, with the support of Centre and Coinbase, has announced that it will now hold the USDC reserve entirely in cash and short duration US Treasuries.”
Center is making these changes as it seeks to make it more transparent. According to the blog post, the changes will reflect in Center’s future attestations by Grant Thornton. USDC is the second-largest stablecoin in the cryptocurrency space, only behind USDT issued by Tether. It has a market cap of over $27 billion, making it the ninth-largest cryptocurrency in terms of market value.
The firm added that “Centre requires that Centre-approved stablecoins be issued by regulated and licensed financial institutions that maintain, at a minimum, full reserves of assets denominated in instruments of the equivalent fiat currency, held in segregated accounts for the benefit of USDC holders.”
Stablecoins have experienced massive growth over the past few years and have gained adoption within the cryptocurrency space. However, regulators, including the United States Securities and Exchange Commission (SEC), have started talking about the need to regulate the activities of the stablecoins and their issuers.
Stablecoins are unlike other cryptocurrencies since their values are tied to fiat currencies in a ratio of 1:1. This means that 1 USDC coin is the same thing as 1 USD. Thanks to their non-volatility and adoption, regulators believe that they could pose a threat to the fiat currencies and need to be properly regulated.
