Circle Redeems 2.9B USDC, and Mints 700M on Mar. 13

SNEAK PEEK

• Circle compensated 2.9 billion USDC and minted 700 million USDC.
• Circle transferred its cash holdings to BNY Mellon to improve stability.
• A diversified portfolio of assets backs USDC stablecoin.

On Mar. 13, Circle, a prominent digital currency company, revealed that it had redeemed a whopping 2.9 billion USDC and simultaneously minted 700 million USDC. This announcement followed an earlier projection of $4 billion to $12 billion without any assistance from the U.S. government for banks. 

As per reports, Circle has been actively processing minting and redemption requests since Mar. 13, when the U.S. banking system reopened, and is currently working through the backlog. Although the revised estimate is lower, Circle’s priority is to expand its network by partnering with more transaction banking providers offering 24/7/365 services.

Consequently, with a focus on improving the stability and value of the USDC, Circle transferred its cash holdings to BNY Mellon, an investment services and wealth management institution. 

However, Circle’s recent blog post highlighted that only a minor fraction of the reserve would be retained with transaction banking partners to aid USDC minting and redemption. Instead, a significant portion of the reserve, mainly comprising short-term U.S. Treasury securities, is held in the Circle Reserve Fund. This fund is managed by BlackRock and kept in custody by BNY Mellon, ensuring the safety and value of the reserve.

Moreover, this approach ensures that the USDC stablecoin is fully backed by a diversified portfolio of assets and minimizes the risk of any potential market fluctuations. Additionally, Circle’s partnership with BlackRock and BNYM adds an extra layer of security and credibility to their stablecoin. 

In conclusion, To continue providing seamless minting and redemption services, Circle is working tirelessly to restore entire USDC liquidity operations, including onboarding new transaction banking partners. As the popularity of USDC grows among crypto enthusiasts, Circle’s efforts to expand its network and improve the stablecoin’s reserve are expected to drive its growth.