Circle Invests 30% of its USDC Reserve in US Treasury

January 9, 2023

MCP News Free

Circle Invests 30% of its USDC Reserve in US Treasury

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The downfall of FTX has prompted many digital assets-related firms to up their games in the transparency of their funds both to investors and creditors.

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Circle Moves to Boost Transparency Amid Crypto Exchange Collapse

To address transparency concerns amid the crypto exchange collapse, the company behind the second largest stablecoin in the crypto market, Circle, has invested 30% of its USD reserve in the US Treasury, Blackrock’s recent publication confirmed.

The 13% invested is equivalent to $13 billion, and with the fact that firms behind stablecoins hold a huge amount of clients’ funds, boosting transparency to assure creditors and investors of the safety of their funds is necessary.

Also, Circle’s investment in US Treasury was to let known to all parties involved in its ecosystem that whenever they need to, they can all withdraw their funds.

The approximate $13 billion is managed by Blackrock, meanwhile, Blackrock has been with Circle since USDC was established. As per the disclosure page, Circle remains the sole beneficiary of the US Treasury investment, and every interest generated from the investment belongs to Circle.

The funds were however held through the Circle Reserve Fund (CRF), a reserve fund that was founded in November 2022. Since the founding of the reserve fund, Circle injecting up to 30% of its current reserve of $45 billion is an excellent move toward gaining creditors’ and investors’ trust.

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