ICYMI is an ongoing series of blog posts memorializing important Twitter threads from thought leaders at Coinbase and beyond. In this thread from 08/22/2021, Coinbase COO and President Emilie Choi clarifies the situation surrounding USDC reserves.
Quick update on USDC. Starting September 2021, USDC reserves will be held in cash and short-duration US government treasuries. This is the approach we want for USDC reserves.
USDC has always been fully backed by reserves equal to or greater than the USDC in circulation, giving users the ability to always redeem 1 USD Coin for US$1.00.
We know that a lot of customers get USDC on Coinbase, and we previously said that every USDC is “backed by a dollar in a bank account.” Our language could have been clearer here.
When Circle shared their May report about USDC reserves in late July (which included a more diversified pool of investments for the first time) we should have moved faster to update statements like that on our website. That was a mistake and Coinbase takes ownership for that.
In any case, the changes in the investment portfolio for USDC reserves began in May 2021 and will not extend past September.
Centre, alongside Circle, will ensure that the USDC investments revert back to a more conservative investment profile by the end of September.
So to be clear, the next 2 attestation reports (June and July) for USDC reserves will show a diversified investment portfolio. This will reverse beginning with the month of August.
*We’ve added links where appropriate. You can see original thread here.