Update on USDC’s Reserve Comes in the Backdrop of UST and USDT Depegging
The team at Circle went on to state that the company ‘intended for USD Coin (USDC) to be the most transparent and trusted dollar digital currency.’ They also added that ‘USDC has always been backed by the equivalent value of U.S. dollar denominated assets’ and redeemable at a one-to-one ratio with US dollars.
Furthermore, its reserves are kept in the custody of BlackRock and Bank of New York Mellon, which are leading US financial institutions.
The update on USDC reserves comes in the wake of a tumultuous two weeks in the crypto markets that started with the US Fed increasing interest rates by 0.50% and continued due to LUNA undergoing massive inflation and UST depegging significantly. The latter event also resulted in the depegging of Tether (USDT) due to the anxiety of possible strict regulation by global financial entities such as the US Treasury.
According to the team at Circle, ‘during the last 7 days, Circle minted 8.4 billion USDC and redeemed 6.7 billion USDC.’ This statement further indicates that USDC also experienced significant trade volume during the aforementioned period of crypto market anxiety brought about by the uncertainty surrounding stablecoins.
[Feature image courtesy of Unsplash.com]
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