Until today, Coinbase had a statement on its website stating that the USD coin (USDC) was "guaranteed to be backed by a dollar in a bank," Bloomberg has learned. As of press time, Coinbase's statement has been removed, however, it is still available on the Wayback Machine. As for now, the page says that USDC is "always redeemable on a one-to-one basis for US dollars."
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"It is backed by dollar-denominated assets of at least equal fair value to the USDC in circulation, in segregated accounts with US regulated financial institutions," the exchange says.
The move comes after Circle, the company behind USDC, released a document in July according to which, the stablecoin is 61% backed by cash equivalents like government obligation money market fund. The asset is also 12% backed by US Treasuries and 5% allocated in corporate bonds.
A spokesperson for Coinbase said that the exchange "added additional detail" so that customers could understand more about USDC reserves.
It is worth noting that in July, Federal Reserve Chair, Jerome Powell, called for a regulatory framework for stablecoins as this type of assets might be a "significant part" of the payments universe. Speaking at the House Financial Services Committee, Powell warned stablecoins are similar to bank deposits, however, they have no regulation.
Earlier, Circle announced plans to become a national commercial bank, operating under the supervision and risk management requirements of the financial watchdogs.
While the details for such to achieve such a milestone remain unclear, Circle CEO Jeremy Allaire said the company already expanded audit attestations to include details on the composition of USDC reserves, including the credit quality of the underlying assets.
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