The USDC stablecoin giant Circle plans to become a “national digital currency bank”. Circle will operate under the supervision of the Federal Reserve, and various agencies run by the U.S. Treasury. The USDC stablecoin issuer will increase the oversight of its reserves to compete with the current leader Tether (USDT).
“We believe that full-reserve banking, built on digital currency technology, can lead to not just a radically more efficient, but also a safer, more resilient financial system,” writes Jeremy Allaire, Circle CEO.
Partnering with Coinbase, Circle manages $27.8 billion in USDC, now the second largest stablecoin by circulation behind Tether. Each USDC token is backed by cash and U.S. dollar-denominated assets such as U.S. Treasuries. Stablecoin issuers like Circle profit from the interest they earn on reserves.
Moving forward, Circle will publish information about the liquidity coverage of its stablecoin USDC under international banking regulation Basel III. Currently, Circle operates under state money transmission regulations, which are less stringent than national banks must follow.
Stablecoin War: USDC to Flip USDT?
Allaire expects the circulating value of USDC will grow to hundreds of billions of dollars in the next few years.
Last month, Circle announced its plans to become a public company via a merger with a SPAC. The deal should value the company at $4.5 billion. This May, Circle raised $440 million from investors including FTX, Fidelity, Digital Currency Group, among others.
Lately, stablecoin USDT issuer Tether has released an assurance report on the breakdown of Tether’s reserves. Per the report, Tether has a total backing of $62.7 billion. Of that, $30.8 billion comes from commercial paper and certificates of deposit. Only 10% of Tether’s backing comes from cash and bank deposits.
On the other hand, the U.S. SEC charges crypto exchange platform Poloniex for breaching securities trading regulations. Circle purchased Poloniex in 2018 for $400 million and spun it out in late 2019. Poloniex agrees to pay over $10 million to settle the charges.
The content of this webpage is not investment advice and does not constitute any offer or solicitation to offer or recommend any investment product. It is for general purposes only.
Metexit! Facebook, now Meta, has seen an executive exodus with an executive at its cryptocurrency division leaving the company. Rob Collier, former head of consumer
United States Federal Reserve chair Jerome Powell opens the door to interest rate hikes next year. Also, Powell is not concerned about cryptocurrencies disrupting financial
Elon Musk, Time’s Person of the Year for 2021, has his carmaker Tesla start accepting meme coin Dogecoin. Customers can use the meme-based cryptocurrency to
Blockchain yes, bitcoin no? HSBC and Wall Street bank Wells Fargo announce a blockchain solution for the foreign exchange (FX) settlement. The two banks will
Is India accepting bitcoin as legal tender? A free bitcoin airdrop to all residents? Just a fake tweet from India Prime Minister Narendra Modi’s twitter
WhatsApp ventures into instant cryptocurrency payments, launching a trial in the US as a first step. Would it be a welcoming signal from the US