Circle looks to reaffirm commitment to transparency as USDC market share soars

Circle looks to reaffirm commitment to transparency as USDC market share soars

As of late, the cryptocurrency market has been in turmoil with many firms declaring bankruptcy or closing down. Voyager Digital filed for bankruptcy on Wednesday. It is now the second defaulting crypto lender after Three Arrows Capital.

Circle, in light of current market conditions, has sought to reaffirm it commitment to transparency and user security with a blog post posted Tuesday. Circle’s CFO, Jeremy Fox, stated that Circle’s top priority is to maintain the financial integrity of its system – strong, reliable, and secure. Fox stated that some financial institutions make false promises about preserving user money and then abandon them when things get tough.

1. Circle has increased the information we have about USDC and Circle as a result of so many companies facing fundamental risks and challenges. It’s being shared here to make it fresh for others to see. These were published in the days immediately following the Terra collapse. https://t.co/SYNpwYxUif
— Jeremy Allaire (@jerallaire), July 2, 2022

According to the CFO, Circle’s business model was to minimize risk and not “taking and managing risks.” Fox also described how Circle protects its USD Coin (USDC), emphasizing that Circle doesn’t own these assets, and that USDC holders are 100% owners of them in separate accounts labeled “for USDC holders”. Fox wrote:

“Circle cannot use USDC reserves for other purposes.” We cannot lend them out like a bank, exchange, or unregulated institution. We also cannot borrow against them and cannot use them for our bills.

In extreme circumstances like bankruptcy, the USD Coin is purportedly still redeemed at face value. The USDC reserves are also completely unrelated to Circle’s activities, which minimizes the possibility of them being used for other losses.

Circle CEO Jeremy Allaire recently provided documentation to show that the stablecoin is sufficiently liquid. To increase transparency and public trust in the company, he published a long Twitter thread that included papers. This thread was inspired by rumors that Circle lost billions of money by offering more generous incentive programs to banks including Signature and Silvergate to convert cash deposits into USDC stablecoin.

Some firms have experienced liquidity problems as a result the bear market. Investors are now concerned that others will follow them. Three Arrows Capital, a once-respected cryptocurrency investment company, was declared insolvent. Celsius is also believed to be contemplating bankruptcy.

Related: Tether USDT to be overthrown by Circle’s USDC in 2022

USDC is not the only stablecoin that’s under fire

USDC isn’t the only stablecoin that has been reported to be generating buzz on Twitter. Similar claims have been made about Tether (USDT), which is the largest stablecoin in the world. Tether’s CTO Paolo Ardoino recently stated that traditional hedge funds had bet against the stablecoin in the hope it would depeg.

Messari: The USDC stack continues its rapid rise to market share from USDT. While USDC marketcap has increased 8.3% since May and USDT marketcap dropped 19%, it has fallen to $66 billion. pic.twitter.com/cRSFFdBT9n
— Alt Crypto Gems (@AltCryptoGems), July 5, 2022

In contrast to Tether, Circle’s USDC saw a remarkable two-month growth rate of 8.27 percent in the past month. USDC’s market capitalization increased 8.27 percent between May and July, hitting a peak of $55.9billion on July 2. USDT’s market capitalization, however, has fallen by 19% to $65.9billion.

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Amy Jimenez– Services My name is Amy Jimenez, and I am the main writer behind the" allthetopnews.com" for the ground-breaking and most fragile bits of knowledge into the most recent news in the services sector. I began my voyage of work as an autonomous investment advisor. I had around 4 years of involvement in this field. I am a free soul so; my energy for investigating the world has taken me to the countries over the globe and allowed me to report for a part of the best news affiliations. At present, I am a full-time manager as experienced in the account and began to utilize my capacities.

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