04/21/2024
BTC65,090.0
ETH3,179.77
USDT1.0
BNB578.65
SOL150.5
USDC0.999989
XRP0.528773
DOGE0.162709
BUSD1.003
Last news
Circle Takes Steps to Mitigate Risks of US Debt Defaults
05/12/2023

Circle Takes Steps to Mitigate Risks of US Debt Defaults

05/12/2023
4,3

Stablecoin issuer Circle has adjusted its reserves treasury to reduce its exposure to potential United States debt defaults.

According to a recent Politico newsletter, Circle CEO Jeremy Allaire stated that the firm has adjusted the mix of reserves backing its USD Coin by switching to short-dated U.S. Treasurys to avoid getting caught up in a potential U.S. debt default.

“We don’t want to carry exposure through a potential breach of the ability of the U.S. government to pay its debts,” Allaire said in the interview.

The Circle Reserve Fund, which is managed by BlackRock, holds no U.S. government debt maturing beyond May 31. 

Treasury Secretary Janet Yellen stated earlier this week that the government will be compelled to make decisions if Congress does not raise the federal debt limit.

Currently, the Biden administration and the Republicans are in conflict over raising the $31.4 trillion borrowing limit. The United States is currently very close to defaulting on its debt, and failure to raise the debt ceiling could destabilize the global financial system. Even though the United States has never defaulted on its debt, a last-minute agreement to solve the situation is very likely.

However, the company has had a turbulent year so far, with the USDC stablecoin losing its peg in March 2023. This led to major withdrawals from the USD Coin, with its market cap dropping by more than 25% in just over the last month.

Over the past year, the supply of USDC has been decreasing, dropping by 46% from its peak of $56 billion in June 2022. As a result, its market share has dwindled to 23%, with a current circulation of $30 billion. Nevertheless, Circle's USDC stablecoin is still the second-largest stablecoin. 

Source and Copyright: © TradingView

Circle has had a turbulent year so far, with the USDC losing its peg in March 2023. This led to major withdrawals from the USD Coin.

Rival stablecoin issuer Tether claims that a majority of its reserves are invested in Treasury bills with an average maturity of fewer than 90 days. The company stated that it has been “working to take steps to reduce its reliance on pure bank deposits as a source of liquidity,” according to a May 10 quarterly assurance report.


Subscribe to Cryptonica.News
on social networks

The materials found on the Cryptonica website shall not be taken as individual investment recommendations. The financial instruments or operations mentioned therein may not align with your investment profile or objectives. We assume no responsibility for any missing facts or inaccurate information in the texts. Cryptocurrencies are financial assets with high risk and volatility. Therefore, it is crucial that you conduct your own research on financial instruments and make independent decisions. Before engaging in any actions related to cryptocurrency, you shall study, understand, and comply with the laws applicable in your region and country.

Jeremy Allaire


How useful is this article for you?
Thank you for your review!

Last news

Explore more

Bitcoin (BTC)
$65,090.0
-0.18%
Buy
IQ (IQ)
IQ
IQ
$0.00936418
-1.27%
Buy
JUST (JST)
$0.0337522
0.08%
Buy
ORDI (ORDI)
$50.92
-0.87%
Buy
Tether (USDT)
$1.0
-0.05%
Buy
USD Coin (USDC)
$0.999989
-0.01%
Buy

HowTo

How to Take Part in the Open League Season 1?
How to Buy Crypto on Telegram Wallet?