Coinbase removes ‘backed by US dollars’ claim for USDC stablecoin


USD Coin (USDC), Circle’s dollar-pegged stablecoin, seemingly lost one of its biggest competitive advantages over its rival, Tether (USDT). Major crypto exchange Coinbase made an important change on the USD Coin page on its website following an audit which revealed that not all of USDC’s reserves were held in cash. This rain contrary to the previous statement that “each USDC is backed by one U.S. dollar held in a bank account.”Coinbase visitors are now greeted with a statement that says USDC is “backed by fully reserved assets” when they enter the USD Coin webpage. This new claim states:“Each USDC is backed by one dollar or asset with equivalent fair value, which is held in accounts with US regulated financial institutions.”Coinbase changed the promotional material for USDC. Source: BloombergUSD Coin stands is the eighth-largest cryptocurrency with a total market cap of over $28 billion. USDC is also the second-largest stablecoin after Tether, which has almost $63 billion in total assets, according to its latest Consolidated Reserves Report.Since its inception, USDC soared as a stablecoin fully backed by U.S. dollars. On the other hand, Tether found itself in hot water with regulators on more than one occasion due to undisclosed commercial paper accounting for almost half of USDT’s total reserves.However, an audit by multi-national tax advisory firm Grant Horton showed that 61% of USDC’s reserves were held in cash and cash equivalents while 9% of the reserves were held in commercial paper. The audit report defines cash as deposits at banks and Government Obligation Money Market Funds, while cash equivalents are defined as securities with an original maturity less than or equal to 90 days.The report revealed the USDC reserves include Yankee CDs and US.. Treasuries and certainly are not “fully backed by U.S. dollar held in a bank account.” According to Bloomberg, the wording for the USD Coin on the website was changed the day the mainstream media contacted Coinbase about the report and related marketing material.Coinbase spokesman Andrew Schmitt reiterated to reporters that each USDC is backed by one dollar or asset with equivalent fair value: “Users can always redeem 1 USD Coin for US$1.00. We have added additional detail to our website for customers to understand more about USDC reserves.”Related: Tether promises an audit in ‘months’ as Paxos claims USDT is not a real stablecoinCircle, the company that oversees USDC in partnership with Coinbase under The Centre consortium, recently announced its plans to become a full-reserve national digital currency bank in the United States. Circle CEO Jeremy Allaire said the company is willing to operate under regulators’ supervision and risk management requirements. As part of the announcement, he said that USDC will grow to “hundreds of billions of dollars in circulation,” continuing to support high-trust economic activity and become a popular tool in financial services and internet commerce applications.Coinbase did not immediately respond to Cointelegraph’s request for comment.

Avatar

Related Articles

- Advertisement -

Latest Articles

bitcoin
Bitcoin (BTC) $ 51,579.82
ethereum
Ethereum (ETH) $ 3,023.72
tether
Tether (USDT) $ 0.999972
bnb
BNB (BNB) $ 379.64
solana
Solana (SOL) $ 102.27
xrp
XRP (XRP) $ 0.545392
staked-ether
Lido Staked Ether (STETH) $ 3,021.06
usd-coin
USDC (USDC) $ 0.999916
cardano
Cardano (ADA) $ 0.588518
avalanche-2
Avalanche (AVAX) $ 36.61
dogecoin
Dogecoin (DOGE) $ 0.085905
tron
TRON (TRX) $ 0.137309
chainlink
Chainlink (LINK) $ 18.48
polkadot
Polkadot (DOT) $ 7.72
matic-network
Polygon (MATIC) $ 0.971717
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 51,571.82
uniswap
Uniswap (UNI) $ 10.56
the-open-network
Toncoin (TON) $ 2.11
internet-computer
Internet Computer (ICP) $ 12.42
shiba-inu
Shiba Inu (SHIB) $ 0.000010
bitcoin-cash
Bitcoin Cash (BCH) $ 267.09
litecoin
Litecoin (LTC) $ 69.88
dai
Dai (DAI) $ 0.999090
filecoin
Filecoin (FIL) $ 8.46
immutable-x
Immutable (IMX) $ 3.10
cosmos
Cosmos Hub (ATOM) $ 10.26
kaspa
Kaspa (KAS) $ 0.171503
leo-token
LEO Token (LEO) $ 4.20
near
NEAR Protocol (NEAR) $ 3.72
ethereum-classic
Ethereum Classic (ETC) $ 26.14
blockstack
Stacks (STX) $ 2.52
bittensor
Bittensor (TAO) $ 576.74
hedera-hashgraph
Hedera (HBAR) $ 0.107859
optimism
Optimism (OP) $ 3.67
aptos
Aptos (APT) $ 9.33
first-digital-usd
First Digital USD (FDUSD) $ 1.00
stellar
Stellar (XLM) $ 0.115789
vechain
VeChain (VET) $ 0.044824
okb
OKB (OKB) $ 50.60
injective-protocol
Injective (INJ) $ 33.99
lido-dao
Lido DAO (LDO) $ 3.30
render-token
Render (RNDR) $ 7.53
celestia
Celestia (TIA) $ 17.03
the-graph
The Graph (GRT) $ 0.299258
mantle
Mantle (MNT) $ 0.791374
crypto-com-chain
Cronos (CRO) $ 0.093042
arbitrum
Arbitrum (ARB) $ 1.85
monero
Monero (XMR) $ 124.08
sei-network
Sei (SEI) $ 0.827334
sui
Sui (SUI) $ 1.62