Greater Transparency for USDC Reserves

Greater Transparency for USDC Reserves

Jeremy Allaire Jeremy Allaire July 20, 2021

Since nearly three years ago when the first USD Coin (USDC) entered circulation, Circle, together with Centre Consortium, have prioritized trust, transparency, and accountability. These priorities have helped USDC grow widely within the global blockchain ecosystem.

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The pillars of this trust, ensuring the total circulation of USDC remains backed on a 1:1 basis with dollar-denominated assets, includes:

  1. Ensuring the highest levels of regulatory and prudential standards governing the USDC ecosystem.
  2. Providing assurances demonstrated by reserve attestations issued by Grant Thornton, one of the world’s leading accounting firms, that dollar-denominated assets can meet circulation for USDC outstanding. Today marks the 33rd such reserve attestation since the first USDC entered circulation, showing our unwavering commitment to fundamental trust in the USDC ecosystem.
  3. Core economic activities underpinning USDC are built inside the perimeter of the U.S. financial system, and not outside of it. Building an open medium of exchange on the internet that imports the fundamental trust of the U.S. dollar and the fundamental oversight and first principles of the U.S. financial system. For this, our commitment to openness, competition, and responsible financial services innovation remains a cornerstone for both the Centre Consortium and Circle.

As USDC in circulation has grown more than 2,600% since the beginning of 2021, so too has our own commitment (along with external calls) to enhanced transparency of the composition of dollar-denominated assets. While public disclosure of reserves is not currently a regulatory requirement for stablecoins or privately issued digital currencies, we want to continue leading the sector with greater transparency and a deeply committed model of public-private collaboration, especially as the role of dollar digital currencies grows in importance in the global financial system.

With this latest reserve attestation, we are now including a breakdown of dollar-denominated  reserve assets, which are all held in the care, custody and control of U.S. regulated financial institutions and in line with laws and guidelines from our U.S. state money transmission regulators. 

Indeed, as pioneers in the digital currency industry, Circle, together with Centre Consortium, have evolved a reserve management model that is more conservative and transparent than comparatively regulated digital payments systems and financial technology (FinTech) organizations. Along these lines, we welcome the work being undertaken by the President’s Working Group on stablecoins, and note that calls for building the future of banking, payments, and money can continue to remain a private sector activity with appropriate public sector and regulatory oversight, transparency and accountability.

As we continue our journey to becoming a public company, we will have increasing opportunities for greater transparency, accountability and disclosure around our broader business and operations. Altogether, this expanding public accountability can help to strengthen trust in Circle, USDC and companies building on the standards and market infrastructure that we have been delivering over the past several years.

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