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Circle Denies USDC Trouble Rumors, Tether Supply Still Up On The Curve

Circle, the US-based payments company that issues the USD (USDC) stablecoin, has denied that it is facing any kind of difficulty maintaining the coin’s US dollar exchange rate. Meanwhile, the supply of tether (USDT) on one of the most used stablecoin liquidity pools is still growing.

Writing in a Twitter thread on Saturday, Jeremy Allaire, Circle’s CEO and co-founder, said that the company decided to step up its information-sharing efforts because of “fundamental challenges and risks” version” that many companies in the crypto space have faced.

In the thread, Allaire linked to a blog post titled “How to Stabilize,” where the company went into detail about the USDC backing. Among the key points, the post states that “USDC is always backed by the equivalent value of the asset in US dollars.”

It added that,

USDC reserves are held entirely in cash and short-term obligations by the U.S. government, including 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 are paranoid with the history of crypto scammers.” He added that he has observed “some obvious confusion” between USDC reserves and the stablecoin itself.

USDC reserves are “regulated,” Allaire said, explaining that this includes rules about 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 the Circle,” he said.

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

The topic comes after several Twitter accounts in recent weeks have shared rumors about Circle, claiming that the company is having trouble maintaining USDC’s US dollar rate.

In a statement to 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 also referred to monthly audits of Circle’s reserves conducted by audit firm Grant Thornton LLP for more details on USDC’s backing.

Tether Supply Still Growing on Curve

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

On the stablecoin swap protocol (CRV) curve, the share of USDT supply in the liquidity pool for USDT, USDC and DAI remains above pre-Terra (LUNA) levels.

Edu Patel, CEO of crypto investment platform Mudrex told Bloomberg.

Tether has denied that there is any reason to doubt its reserves, claiming that some hedge funds are trying to profit from instilling fear in the market. The company’s chief technology officer, Paolo Ardoino, said on Twitter in June that Tether is following through on its pledge to “remove [commercial paper] exposure and move it into the US Treasury […].”