USDC Stablecoin Provider in Its ‘Strongest Financial Position Ever’ Says Circle CEO

The CEO of financial services provider Circle, Jeremy Allaire, took action to dispel fears that the company’s USDC stablecoin was about to crash. Allaire stated in a weekend Twitter conversation that he could see why the crypto community “would be paranoid” about USDC given the recent failure of some well-known crypto projects.

The Circle CEO declared, “Circle is in the strongest position it has ever been in financially, and we will continue to increase our transparency,” Allaire submitted Circle’s most current reports on trust and transparency, audits and attestations, as well as the liquidity situation of USDC to support his claims.

Circle’s CEO made these comments following reports that the company may not be able to make its USDC reserve payments because of the substantial interest payments it must make to banks with a focus on cryptocurrencies like Signature and Silvergate.

Additionally, lending activities involving Genesis, BlockFi, Celsius, Galaxy, and Three Arrows Capital employ stablecoin (3AC). Each of these cryptocurrency companies has been affected by a liquidity problem that has reverberated throughout the whole sector.

These rumors appear to have been addressed head-on by Allaire, who clarified that the USDC held in reserves is distinct from the USDC used in lending markets.

Allaire wrote:

There is also some obvious confusion between USDC reserves—which are regulated (where and what we can hold), examined (by regulators and assurance firms), and transparent (weekly flows and composition)—and USDC that itself is used in lending markets, away from Circle.

He continued by saying that Circle would publish a blog post this week on Circle Yield, the company’s short-and long-term yield interest rate product built entirely on the USDC stablecoin. He emphasized that the product in question is over-collateralized and regulated and that it is only available to accredited investors, with whom Circle has relationships.

Circle, which is eyeing a public listing via a special purpose acquisition company (SPAC), was valued at $9 billion in February this year. In addition to annual audits, the Boston-based firm also publishes monthly statements of the size and composition of the USDC reserve.

The USDC stablecoin is the second-largest stablecoin in the crypto market, boasting a market capitalization of $55.8 billion, doubling over the past year and approximately just $10 billion away from market leader Tether (USDT).

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