1 year ago
In a caller report connected the authorities of the USDC economy, Circle devoted a conception connected the stablecoin “always” being 1:1 redeemable for U.S. dollars.
Overall, 2022 was a challenging twelvemonth for USDC, with allegations of insolvency and accusations of censorship being fired astatine the stablecoin.
However, successful recapping its attack to the ecosystem and outlook ahead, Circle said it had kept its cardinal committedness of dollar parity contempt the industry-wide accent trial of past year.
Moreover, with the increasing statement successful favour of “digital dollars,” the aboriginal looks agleam for well-regulated and trusted offerings. According to the report:
“The committedness of well-regulated integer dollars similar USDC is fulfilling things that would not beryllium imaginable with wealth if it remained successful carnal signifier and lone traveled connected largely-closed networks oregon analog rails.”
USDC is “always” redeemable
According to Circle, the institution has redeemed $213 cardinal since its motorboat successful 2018. This is imaginable acknowledgment to the prudent absorption of USD assets backing the token.
On that, 80% of the plus reserves subordinate to 3-month U.S. Treasuries, “which are among the astir price-stable and liquid assets successful the world.” At the aforesaid time, the remaining 20% is held arsenic currency crossed 8 antithetic U.S.-regulated banks.
Additionally, Circle is regulated and licensed nether U.S. authorities money transmission licenses and arsenic a wealth services concern (MSB) with the U.S. Treasury — meaning it follows cognize your customer
(KYC), anti-money laundering (AML), and fiscal coercion rules.
Users tin beryllium further assured by monthly attestations from the accounting steadfast Grant Thornton that the institution has much dollar-denominated reserves than USDC tokens successful circulation.
“We person created a robust, risk-intelligent operating situation by embedding proactive and holistic identification, assessment, mitigation, monitoring, and reporting of risks and controls wrong each our concern and merchandise lines, functions, and processes.”
Circle controversies
In the aftermath of the Tornado Cash sanctions imposed by the U.S. Treasury and Circle’s compliance with censorship mandates, USDC has suffered from reputational damage.
At the time, ShapeShift CEO Erik Voorhees recommended MakerDAO users person USDC for another, much censorship absorption stablecoin. Likewise, Ryan Adams of the Bankless Podcast said the actions of the U.S. Treasury were “the opening changeable of large brother’s battle connected crypto.”
In addition, arsenic crypto contagion dispersed from the illness of Luna, 3AC, Babel, and Celsius, rumors were circulating that Circle was besides connected the brink of illness owed to their purported exposure.
The rumors were rapidly unopen down pursuing the merchandise of the archetypal USDC reserve plus report successful July 2022.
Commenting connected censorship and relationship blacklisting, Circle CEO Jeremy Allaire said the institution is legally required to comply with requests from authorities investigating transgression activity.
The station Circle: USDC stablecoin is ever 1:1 redeemable for US dollars appeared archetypal connected CryptoSlate.
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