Circle started publishing weekly reports on USDC stablecoin reserves

The initiative aims to increase investor confidence in stablecoin

23.05.2022 - 09:10

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What’s new? Circle (the issuer of the USDC stablecoin) CEO Jeremy Allaire has announced that the company will publish weekly reports on the asset’s reserves. This move is intended to increase USDC’s transparency operation amid the TerraUSD (UST) rate crash and problems with pegging other stablecoins to the US dollar.

Stablecoin page on the Circle website

What data does the report contain? Circle claims that USDC is fully backed by cash and US Treasury bonds. The company’s weekly reports contain data on the amount of USDC in circulation and the structure of the stablecoin’s collateral. As of May 20, 2022, the circulating USDC supply was 52,9 billion, of which 12,8 billion was secured by cash and 40,2 billion by Treasury bonds.

Between May 13 and 20, 8,6 billion USDC were issued and 6,3 billion tokens were withdrawn from circulation. The increase for the week amounted to 2,3 billion USDC.

What events happened before? On May 8, the rate of the algorithmic stablecoin UST lost its peg to the dollar and dropped to $0,22 over the following days. The rate of its backing token LUNA also plummeted by 86% per day. As of May 23, UST is trading at $0,066 and LUNA at $0,000186 (Binance data). For a full timeline of events surrounding the rate collapse of UST and LUNA, check out GetBlock Magazine’s special feature.

On May 18, SEC chief Gary Gensler predicted the collapse of most digital assets’ rates by analogy with Terra. In his view, the prices of other coins would fall to almost zero, hurting even more investors.

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