{"id":321459,"date":"2021-08-11T12:15:22","date_gmt":"2021-08-11T09:15:22","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/coinbase-removes-backed-by-us-dollars-claim-for-usdc-stablecoin\/"},"modified":"2021-08-11T12:15:22","modified_gmt":"2021-08-11T09:15:22","slug":"coinbase-removes-backed-by-us-dollars-claim-for-usdc-stablecoin","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/coinbase-removes-backed-by-us-dollars-claim-for-usdc-stablecoin\/","title":{"rendered":"# Coinbase removes \u2018backed by US dollars\u2019 claim for USDC stablecoin"},"content":{"rendered":"

“# Coinbase removes \u2018backed by US dollars\u2019 claim for USDC stablecoin <\/strong>”<\/p>\n

USD Coin (USDC), Circle\u2019s dollar-pegged stablecoin, seemingly lost one of its biggest competitive advantages over its rival, Tether (USDT).\u00a0<\/p>\n

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\u2019s reserves were held in cash. This rain contrary to the previous statement that \u201ceach USDC is backed by one U.S. dollar held in a bank account.\u201d<\/p>\n

Coinbase visitors are now greeted with a statement that says USDC is \u201cbacked by fully reserved assets\u201d when they enter the USD Coin webpage. This new claim states:<\/p>\n

\u201cEach USDC is backed by one dollar or asset with equivalent fair value, which is held in accounts with US regulated financial institutions.\u201d<\/p><\/blockquote>\n

Coinbase changed the promotional material for USDC. Source: Bloomberg<\/em><\/figcaption><\/figure>\n

USD 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.<\/p>\n

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\u2019s total reserves.<\/p>\n

However, an audit by multi-national tax advisory firm Grant Horton showed that 61% of USDC\u2019s 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.<\/p>\n

The report revealed the USDC reserves include Yankee CDs and US.. Treasuries and certainly are not \u201cfully backed by U.S. dollar held in a bank account.\u201d According to Bloomberg, the wording for the USD Coin on the website was changed<\/a> the day the mainstream media<\/a> contacted Coinbase about the report and related marketing material.<\/p>\n

Coinbase spokesman Andrew Schmitt reiterated to reporters that each USDC is backed by one dollar or asset with equivalent fair value: <\/p>\n

\u201cUsers 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.\u201d<\/p><\/blockquote>\n

Related:\u00a0Tether promises an audit in \u2018months\u2019 as Paxos claims USDT is not a real stablecoin<\/em><\/strong><\/p>\n

Circle, 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. <\/p>\n

As part of the announcement, he said that USDC will grow to \u201chundreds of billions of dollars in circulation,\u201d continuing to support high-trust economic activity and become a popular tool in financial services and internet commerce app<\/a>lications.<\/p>\n

Coinbase did not immediately respond to Cointelegraph’s request for comment.<\/p>\n