Circle Denies Rumors of USDC Collapsing 

Circle, the U.S. payments company that issues the stablecoin USD coin (USDC), has denied facing any sort of difficulties in maintaining the coin’s US dollar peg. Meanwhile, Tether (USDT) coins’ supply on one of the most used stablecoin liquidity pools remains high.

 

Jeremy Allaire, CEO and co-founder of Circle, wrote on Twitter Saturday that the company had decided to step up its information-sharing efforts in light of the “fundamental challenges and risks” that many companies in the crypto space have faced.

 

In the thread, Allaire linked to a blog post titled “How to Be Stable,” where the company went into detail on the backing of USDC. Among the key points, the post claimed that “USDC has always been backed by the equivalent value of U.S. dollar denominated assets.”

 

It added that,

“The USDC reserve is held entirely in cash and short-dated U.S. government obligations, consisting of U.S. Treasuries with maturities of 3 months or less.”

 

The Circle CEO stated in his Twitter thread that it is “understandable why some users would be paranoid given the history of hucksters in crypto.” He further said that he has observed “some obvious confusion” between USDC reserves and the stablecoin itself.

 

USDC’s reserves are “regulated,” Allaire said, explaining that this includes rules on what assets Circle can hold as reserves, as well as where they can be held. Meanwhile, USDC itself is a stablecoin used in lending markets “away from Circle,” he said.

 

“Circle is in the strongest position it has ever been in financially, and we will continue to increase our transparency,” the Circle CEO concluded his thread by saying.

 

The thread came after some Twitter accounts in recent weeks have shared rumors about Circle, claiming that the company is facing difficulties in maintaining USDC’s US dollar peg.

 

In a statement to Cryptonews last week, a Circle spokesperson said that the company’s business remains “strong,” and that Circle is committed to “building trust and providing full transparency.” The spokesperson further referred to monthly audits of Circle’s reserves by auditing firm Grant Thornton LLP for details on USDC’s backing.

 

Tether’s Supply Remains High on Curve

Meanwhile, the world’s most popular stablecoin USDT, issued by Tether, continues to be under pressure in the secondary market, Bloomberg reported on Sunday.

 

On the stablecoin swapping protocol Curve (CRV), USDT’s share of the supply in a liquidity pool for USDT, USDC, and DAI still remains above the level from before the Terra (LUNA) collapse.

 

The elevated supply of USDT indicates some hesitation among traders about holding it, Edu Patel, CEO of crypto investment platform Mudrex told Bloomberg.

 

Tether has denied that there is any reason to doubt its reserves, while claiming that some hedge funds are trying to profit from the fear spread in the market. Paolo Ardoino, the company’s chief technology officer, said on Twitter in June that Tether is fulfilling its commitment to “phase out [commercial paper] exposure and move into US Treasuries […].”