Coinbase Removes USD Coin (USDC)”Backed By Dollar” Statement
2021年8月13日 - 1:00AM
NEWSBTC
Tether (USDT) now has an advantage over USD Coin (USDC). As a
result, Circle’s dollar-pegged stablecoin, USDC, lost one of its
largest leveraging stances to its main competitor, USDT. Coinbase,
one of the prominent players in crypto exchange, has made a crucial
change on the USD Coin page. The crypto exchange placed the change
on its website. Related Reading | Vitalik Buterin Urges
Ethereum To Grow Beyond DApps This was in response to an audit that
exposed that a few USDC’s reserves were not held in cash. The audit
discovery contradicts the statement that every USDC has a
corresponding backing of one dollar in a bank account. Coinbase
Brings New Changes By Bringing USD Coin Into Public From the recent
change, the entry statement on the USD Coin webpage is also
affected. Coinbase visitors now get a new welcome statement saying
that USDC has backing by fully reserved assets. In addition, the
statement now says that every USDC is backed by one dollar or an
equivalent asset with fair value. Also, it mentions that the
backing is held in accounts under US-regulated financial
institutions. USD Coin has more than $28 billion and is rated as
the eighth-largest digital asset. Furthermore, it is the
second-largest stablecoin, coming closing behind Tether that takes
the top. Tether’s latest Consolidated Reserves Report reveals that
the cryptocurrency has about $63 billion assets in its custody.
Related Reading | Government Still Sees Blockchain As “Wild West”
Says Blockchain Australia From its time of launch, USDC operates as
a stablecoin fully backed by US dollars. Conversely, Tether, its
major competitor, has been involved in multiple legal fights with
regulators. The contributory factor is the hidden commercial paper
that claims about half of its total reserves. Nevertheless, the
audit of Grant Horton, a multi-national tax advisory company, comes
the discovery about the true backing for USDC. The audit reveals
that only 61% of USDC’s reserves are in cash and cash equivalents.
Also, some reserves that accrued to 9% are in commercial paper
forms. USD Coin thrives in the green zone as the market gets ready
for a bullish run | Source: USDCUSD on TradingView.com From the
definition of the audit reports, cash consists of deposits with
banks and Government Obligation Money Market Funds. It further
defined cash equivalents as securities that have a 90-day original
maturity period or less. Furthermore, Yankee certificates of
deposit and U.S. Treasuries were discovered to be part of USDC
reserves from the audit. These included reserves have no full
backing by US dollars held in a bank account. Bloomberg explained
that Coinbase changed USD Coin webpage wording when the crypto
exchange received the audit report. Reacting to the recent report,
Andrew Schmitt, Coinbase spokesperson, said that there’s the
backing of $1 or its equivalent fair value asset for each USDC. He
explained that the redemption of 1 USDC remains $1 for users. Also,
he mentioned that the company has additional information on its
website for a clearer understanding of USDC reserves. On its part,
the partnering company with Coinbase that oversees USDC, Circle,
made a recent announcement. The company discloses its plan of
becoming a full-reserve national digital currency bank in the U.S.
The company’s CEO, Jeremy Allaire, affirms the company’s readiness
to comply with all regulatory and risk management requirements.
Through his announcement, Allaire expresses his expectation for
USDC rising to hundreds of billions of dollars. Also, he said the
stablecoin could move to support more economic activities and be a
prominent tool in financial and commercial advancements. Featured
image from CoinCodex, chart from TradingView.com
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