Coinbase Modifies Its USD Coin (USDC) Information Page
Tether’s USDT now has leverage over its main rival, the dollar-pegged USDC stablecoin. Today, top crypto exchange, Coinbase announced that it is modifying its USD coin information page.
The change became necessary when a recent audit of the stablecoin assets revealed that part of USDC’s reserves aren’t in cash, which negates the notice by the USDC issuer, circle, that each USDC is backed by a dollar deposited in a financial institution.
Coinbase Welcomes USDC Page Viewers With A Notice Of The Change
This discovery caused Coinbase Coinbase to put out a notice on the USDC information page stating that reserved assets fully back the USDC. Furthermore, the notice states that an equal asset backs each USDC with fair value and not just the dollar. The notice further revealed that this backing is in us-regulated bank accounts.
USDC is ranked among the top eight cryptocurrencies of the world, and its circulating supply is over 27 billion. Also, it continues to vie with Tether as the top stablecoin in the world. But as of now, Tether is the number one stablecoin globally. Tether’s last issued reserves report indicates that it is a custodian of over $64B worth of assets.
Audit Report Exposes USDC Reserves Claims
USDC was launched as a dollar-backed stablecoin, while Tether has always had it tough with financial regulators. An external audit by grant Horton, an acknowledged leader in tax advisory services, revealed that almost 40% of USDC’s reserves are in commercial paper. At the same time, the remaining portion is backed by the dollar in bank accounts.
The auditors defined cash reserves as bank deposits and mandatory money market funds with the appropriate authorities. It also said securities whose maturity period wouldn’t exceed three months can also be categorized as cash reserves.
But the auditors discovered that some of the USDC reserves were in Yankee certificates of deposit and US treasuries. But they weren’t backed by a dollar-denominated bank account.
The Change Was Necessary
Bloomberg reports that the fallout from the audit made it compulsory for Coinbase to change the information details about USDC on its website. Commenting on the recent development, a Coinbase rep, Andrew Schmitt, revealed that “one USDC is still equal to $1, but the company has put out more details on its website for anyone seeking more explanation.”
Coinbase is the leading exchange partner with USDC issuer, circle. As widely reported a few days ago, USDC issuer, Circle, revealed that it is working on becoming a national bank and won’t mind the additional oversight that comes with it.
Circle Chief, Jeremy Allaire, confirmed that his firm is always ready never to breach any compliance policies or financial requirements. Allaire further said this move would enable the company to prepare for when it becomes a custodian of assets worth billions of dollars. He also said the plan is for USDC to be a force in the country’s financial and economic landscape, especially in offering modern financial tech tools. Like all other cryptocurrencies, USDC has also been trading in the green as the market’s bullishness continues.
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