The stablecoin USD coin (USDC), which is issued by Circle, a US-based payments company, has no difficulties keeping the peg to the US dollar. Tether (USDT) coin supply on one of the busiest stablecoin liquidity pools is still high in the interim.
The CEO and co-founder of Circle, Jeremy Allaire, stated on Twitter on Saturday that the company has made the decision to increase its information-sharing efforts in light of the “basic issues and risks” that many businesses in the cryptocurrency field have encountered.
In the conversation, Allaire included a link to a blog entry titled “How to Be Stable,” in which the business elaborated on USDC’s support. The post stated that “USDC has always been backed by the equivalent value of U.S. dollar denominated assets,” which was one of its main themes.
The whole USDC reserve is maintained in cash and short-dated US government securities, which are US Treasuries with maturities of three months or less.
Given the history of scammers in the cryptocurrency industry, the Circle CEO wrote in a Twitter thread that it is “understandable why some customers might be paranoid.” The stablecoin itself and USDC reserves, he continued, had caused “some clear confusion.”
Allaire explained that this includes guidelines on what assets Circle can maintain as reserves, as well as where they can be held, and that this is why USDC’s reserves are “controlled.” According to him, USDC is a stablecoin that is used in lending markets “apart from Circle.”
The Circle CEO closed his post by adding, “Circle is in the strongest financial situation it has ever been in, and we will continue to expand our transparency.”
The discussion started after reports concerning Circle surfaced on Twitter in recent weeks, according to which Circle is having trouble keeping USDC pegged to the US currency.
A Circle spokeswoman said last week that the company’s operations are still “robust” and that Circle is dedicated to “creating trust and giving complete transparency.” For more information on USDC’s backing, the spokesman also cited Grant Thornton LLP’s monthly audits of Circle’s reserves.
On Curve, the supply of Tether is still high.
The most widely used stablecoin in the world, USDT, which is issued by Tether, is still experiencing pressure on the secondary market, according to a Sunday Bloomberg story.
In a liquidity pool for USDT, USDC, and DAI using the stablecoin swapping protocol Curve (CRV), USDT’s portion of the supply is still higher than it was before to the Terra (LUNA) collapse.
According to Edu Patel, CEO of cryptocurrency investing platform Mudrex, the high supply of USDT implies some reluctance on the part of traders to keep it.
While asserting that some hedge funds are attempting to make money by inciting fear in the market, Tether has denied that there is any reason to question the validity of its reserves. On Twitter in June, Tether’s chief technical officer Paolo Ardoino stated that the business is keeping its promise to “phase out [commercial paper] exposure and go into US Treasuries […].”