Circle discloses USDC reserve structure: 80% in short-term U.S. Treasury bonds, approximately 20% in cash deposits held at GSIB

ChainCatcher news, Circle disclosed on its official blog "The Structure and Management of USDC Reserves." Approximately 80% of USDC reserves are in short-term U.S. Treasury securities, and about 20% are cash deposits in the U.S. banking system. The reserves are fully transparent and subject to third-party assurance that sufficient assets are available to meet liabilities. They do not include any other assets with different risk profiles.

The Treasury securities in the USDC reserves are held by a wholly-owned government money market fund structure regulated by the SEC. They are not subject to any lock-up or redemption thresholds. There are daily independent third-party reports on the portfolio, detailing each security.

Circle holds about 20% of its cash reserves to meet customers' immediate liquidity needs. Following several recent bank failures, Circle has taken steps to reduce risks in the banking system, placing nearly all of the cash portion of its reserves in the now 30 globally significant banks (also known as GSIBs). GSIBs are widely regarded as the safest banks, with the highest capital, liquidity, and regulatory requirements in the world. Circle also holds a small amount of funds with trading bank partners to support USDC liquidity operations.

Additionally, Circle stated that the company has long sought to hold the cash portion of USDC reserves directly at the Federal Reserve, realizing the vision of USDC as true tokenized cash. For this, stablecoin legislation is needed. Circle also mentioned that for the benefit of USDC holders, USDC reserves are held in segregated accounts. (source link)