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) $ 27,079.26
ethereum
Ethereum (ETH) $ 1,880.66
tether
Tether (USDT) $ 1.00
bnb
BNB (BNB) $ 280.06
usd-coin
USD Coin (USDC) $ 0.999793
xrp
XRP (XRP) $ 0.527168
staked-ether
Lido Staked Ether (STETH) $ 1,881.10
cardano
Cardano (ADA) $ 0.348801
dogecoin
Dogecoin (DOGE) $ 0.069682
solana
Solana (SOL) $ 20.28
matic-network
Polygon (MATIC) $ 0.814373
tron
TRON (TRX) $ 0.078461
litecoin
Litecoin (LTC) $ 90.08
polkadot
Polkadot (DOT) $ 5.17
avalanche-2
Avalanche (AVAX) $ 14.57
binance-usd
Binance USD (BUSD) $ 0.998156
shiba-inu
Shiba Inu (SHIB) $ 0.000008
dai
Dai (DAI) $ 1.00
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 27,163.28
uniswap
Uniswap (UNI) $ 4.75
leo-token
LEO Token (LEO) $ 3.53
chainlink
Chainlink (LINK) $ 6.22
cosmos
Cosmos Hub (ATOM) $ 10.08
okb
OKB (OKB) $ 45.27
monero
Monero (XMR) $ 147.34
ethereum-classic
Ethereum Classic (ETC) $ 17.45
the-open-network
Toncoin (TON) $ 1.67
stellar
Stellar (XLM) $ 0.089253
bitcoin-cash
Bitcoin Cash (BCH) $ 114.92
lido-dao
Lido DAO (LDO) $ 2.38
true-usd
TrueUSD (TUSD) $ 1.00
internet-computer
Internet Computer (ICP) $ 4.37
filecoin
Filecoin (FIL) $ 4.33
quant-network
Quant (QNT) $ 115.54
aptos
Aptos (APT) $ 8.10
hedera-hashgraph
Hedera (HBAR) $ 0.049528
crypto-com-chain
Cronos (CRO) $ 0.059754
arbitrum
Arbitrum (ARB) $ 1.18
near
NEAR Protocol (NEAR) $ 1.52
vechain
VeChain (VET) $ 0.018640
apecoin
ApeCoin (APE) $ 3.07
the-graph
The Graph (GRT) $ 0.117583
frax
Frax (FRAX) $ 0.999331
paxos-standard
Pax Dollar (USDP) $ 0.999746
algorand
Algorand (ALGO) $ 0.136115
eos
EOS (EOS) $ 0.884124
the-sandbox
The Sandbox (SAND) $ 0.523580
optimism
Optimism (OP) $ 1.47
rocket-pool
Rocket Pool (RPL) $ 48.71
elrond-erd-2
MultiversX (EGLD) $ 36.47