As the world begins to recognise the benefits of cryptocurrencies and blockchain technology, an increasing number of people are selecting USD Coin (USDC) as their digital dollar currency for transacting, storing value, and serving as a unit of account. USDC is the world’s leading regulated stablecoin, and the market’s faith in it is directly related to how it was founded and how it operates today. USDC was created as an open-source initiative that adheres to US money transmission laws and regulations, employs established institutions and auditors, and operates on blockchain technology via smart contracts. True financial and operational openness is the goal.
The investment of USDC reserves is regulated by the authorised investment guidelines under state money transmission regulations, as well as, more conservatively, by the Centre’s Reserve Management Policy (an updated version of which will soon be available on our website). The Centre mandates that stablecoins certified by the Centre be issued by regulated and licenced financial institutions that maintain, at a minimum, full reserves of assets denominated in equivalent fiat currency instruments stored in segregated accounts for the benefit of USDC holders.
In May 2021, Circle reserves grew beyond cash and cash equivalents, and the corporation disclosed a more extensive breakdown of reserve composition in July, providing clarity and insight into the funds underlying USDC. Circle, with the backing of Centre and Coinbase, has announced that it will now store the USDC reserve solely in cash and short-term US Treasuries, in response to community feedback, our commitment to trust and transparency, and a shifting legal landscape. These adjustments are being applied quickly and will be reflected in future Grant Thornton attestations.
In response to input from USDC users, developers, and other stakeholders, the Centre is strengthening its commitment to transparency and exploring new avenues for collaboration with the community. We anticipate to announce numerous new options for members to become more formally involved in the Centre’s standards and governance operations later this year.
The Centre’s standards have offered assurance and trust to the ecosystem, resulting in USDC’s phenomenal expansion over the last year. USDC is actively used on major exchanges and in defi protocols, and it is progressively being used as a method of payment in a wide range of applications. The goal of multi-chain and multi-issuer Centre standard stablecoins is becoming a reality, with USDC now live on five blockchains and soon to be on several more, and Centre’s standards and processes now being used to develop new non-dollar fiat backed digital currencies in countries across three continents, further expanding users’ ability to make digital transactions with the highest degree of security.