- Circle has released a statement from Grant Thornton LLP, an independent accounting firm, about their USDC token
- According to the report, Circle’s stablecoin does not exceed the amount of fiat currency in its custodian account
Grant Thornton LLP, an independent accounting firm, has released its attestation of Circle’s reserves for its USD coin.
The report stated the following:
* USD Coin (“USDC”) tokens issued and outstanding = 127,408,827 USDC
* US Dollars held in custody accounts = $127,412,240.89
As a result, it was determined that the amount of USDC tokens did not exceed the amount of US Dollars in the custody accounts, meaning that the tokens were sufficient backed up by fiat currency.
This was determined based on figures reported as of the 31st of October 2018 and according to Grant Thornton LLP, was in accordance with the attestation standards of the American Institute of Public Accountants.
The trouble with stablecoins
Stablecoins have been used as a tool for attracting both institutional investors and also to allay public skepticism about cryptocurrencies.
Stablecoins, are, essentially, digital currencies that are backed up by fiat currency.
The reasoning behind this is that digital currencies aren’t seen as ‘real’ by a number of people and tying it to traditional currencies lends them some level of credibility in the eyes of some people.
However, the issue of stablecoins has attracted some controversy in the past, with some doubting that some stablecoins are even backed up with fiat currency at all.
One of the most controversial stablecoins is Tether USDT.
One one hand, people doubt the coin is backed up by any fair currency at all.
More controversially, it has been accused of simply being a manipulation tool for Bitcoin.
This has raised a lot of discussions, with one study disputing the claims of price manipulation.
Regardless of the study, the claims still persist and just this week, there were reports that the Department of Justice is opening an investigation into crypto exchange Bitfinex and Tether Ltd.
The investigation will look into Bitfinex possibly using Tether’s coin to manipulate the bitcoin price.
Calming the storm
These claims and controversies could harm the reparation of stablecoins in the long run.
This move by Circle of having an independent firm look into and attest to the validity of their stablecoin will help quiet the critics.
Tether, on their part, have announced a new banking partner and a balance of nearly $2 Billion.