USDC, which is issued by Coinbase and Circle, drew criticism earlier this month after Bloomberg reported that the Coinbase website said that each stablecoin was backed by $1 “in a bank account,” even though its own report showed that 9% of USDC’s reserves were in commercial paper.
The report prompted Coinbase to change the USDC description on its website and on Monday, Coinbase President and COO Emilie Choi tweeted that the company’s “language could have been clearer” and that Coinbase should have moved faster to update its site. She also said that starting in September, all USDC reserves will be held in cash and short-term U.S. Treasuries, which are less risky investments than commercial paper.
That switch would make USDC more in line with Paxos’ USDP, which has all of its reserves in cash and Treasuries, according to Paxos’ latest reserve report.
JP on Circle S4
The big problem of small change, which is that it’s hard to charge $1.01 for a dollar. The yield on these reserves is tiny.
So what is the stablecoin business model?
Snippings 