The failure of algorithmic stablecoin TerraUSD earlier this month prompted investors to seek refuge in other crypto assets that try to maintain a one-to-one peg with the US dollar. Tether’s USDT briefly lost its dollar peg and dropped to 95 cents on May 12 as a result of the subsequent market downturn that shook cryptocurrencies and stablecoins alike. Tether has also released an assurance report on its stablecoin reserves, which was issued by the Cayman Islands auditing firm MHA Cayman.
Jeremy Allaire, the co-founder and CEO of Circle, has stated that the cryptocurrency firm that issues the stablecoin USD coin will give weekly stablecoin reserve reports to the public.
Tether and Circle, the two major stablecoin providers, want the world to know that tether (USDT) and USD coin (USDC) are entirely backed by reserves.
‘How to be Stable’
The latest promises come after the recent de-pegging of the terra usd (UST), which saw the currency fall from a once-stable $1 parity to $0.06 per UST today.
Following the event, Circle released a blog post titled “How to Be Stable” on May 13 explaining that Circle’s USDC reserves are wholly backed by cash and short-dated US Treasury bonds. Following the blog post, Circle’s co-founder and CEO, Jeremy Allaire, said a week later that the firm will henceforth issue weekly USDC attestations regarding the stablecoin’s reserves and liquidity.
As of May 20, 2022, the USD coin (USDC) in circulation is 52.9 billion, while Circle’s reserve backing count is $53 billion. The USDC is backed by $12.8 billion in cash and $40.2 billion in short-term US Treasury bonds.
USDC accounts for 3.95 percent of the $1.3 trillion crypto market, and it has seen $3 billion in worldwide trading volume in the last 24 hours. The second-largest fiat-pegged crypto-asset connected to the value of the US dollar is Circle’s stablecoin.