A quick note on a significant development in the Circle/USDC/stablecoin drama, which I’ve written about on several occasions. After 46 days, Circle finally released their May attestation report this morning. Once again, the company made important changes to their attestation language. Most critically, Circle finally released composition details of the reserves backing their stablecoin, USDC.
I find myself to share the skeptical nature of the Doomberg Chicken and just can't help but wonder why 61% (similar to what Frank said) is "Cash & Cash Equivalents". Common Sense Thought: Given the nature of scrutiny over Stablecoins and their reserves -- if you had a substantial amount of cash OR high quality cash equivalents -- you would want to be AS EXPLICIT as possible. That would separate you and is the most common sense / logical thing to do.
Something tells me the Chicken will be back on this USDC Stablecoin in the near future.
61% of USDT backing is in cash and cash equivalents, but there's no breakdown of what are the cash equivalents, and how much. Circle defines its commercial paper only as 91 - 400 day maturing grade A1 commercial paper, which is a nice way of dodging what ended up hounding USDT in the press. Look guys, our "commercial paper" is grade A1, just ignore this other pile of commercial paper. It's as good as cash, trust us. Any commercial paper that matures within 90 days or less is a whole other magical class of asset with no associated risk.
At this rate, USDT could be backed 1% by cash, and 60% by short term revolving IOUs from Coinbase, and we'd never know the difference so long as Circle itself thinks Coinbase is good for it. This is what an audit would clear up, which is also why we're never going to get one.
I find myself to share the skeptical nature of the Doomberg Chicken and just can't help but wonder why 61% (similar to what Frank said) is "Cash & Cash Equivalents". Common Sense Thought: Given the nature of scrutiny over Stablecoins and their reserves -- if you had a substantial amount of cash OR high quality cash equivalents -- you would want to be AS EXPLICIT as possible. That would separate you and is the most common sense / logical thing to do.
Something tells me the Chicken will be back on this USDC Stablecoin in the near future.
Table instead of a pie chart. Otherwise not worth the paper it's not printed on.
61% of USDT backing is in cash and cash equivalents, but there's no breakdown of what are the cash equivalents, and how much. Circle defines its commercial paper only as 91 - 400 day maturing grade A1 commercial paper, which is a nice way of dodging what ended up hounding USDT in the press. Look guys, our "commercial paper" is grade A1, just ignore this other pile of commercial paper. It's as good as cash, trust us. Any commercial paper that matures within 90 days or less is a whole other magical class of asset with no associated risk.
At this rate, USDT could be backed 1% by cash, and 60% by short term revolving IOUs from Coinbase, and we'd never know the difference so long as Circle itself thinks Coinbase is good for it. This is what an audit would clear up, which is also why we're never going to get one.