stablecoin issuer Circlereportedly adjusted its reserve treasury to mitigate risks of United States debt defaults.
Circle CEO, according to Politico’s May 10 newsletter Jeremy Allairein order to avoid a possible debt default. USD CoinsHe said he has adjusted the mix of reserves that support his stocks to favor short-term U.S. Treasury bonds.
Allaire: We Want to Avoid Debt Risk
Making a statement on the subject, Jeremy Allaire said that the company no longer holds treasury bonds due after the beginning of June because it wants to avoid debt risk.
Allaire continued, “We don’t want to take risks through a potential breach of the US government’s ability to pay its debts.” BlackRockThe Circle Reserve Fund, managed by the company, stated that the current assets are due by May 31 at the latest.
Earlier this week, the Secretary of the Treasury Janet YellenHe said the government would have to make decisions if Congress didn’t raise the federal debt limit.
US President Joe Biden and Republicans disagree about raising the $31.4 trillion borrowing limit. If the country cannot pay its debts, the $24 trillion treasury market and the global financial system will be shaken.
Circle said it is seeking to take steps to reduce its reliance on pure bank deposits as a source of liquidity, according to its May 10 quarterly assurance report.
USDC supply has shrunk over the past year and has fallen 46 percent since its all-time high of $56 billion in June 2022. This caused its market share to decrease to 23 percent with a circulation of 30 billion dollars. The most profitable competitor from this situation is the competitor whose market dominance increased to 62 percent with a circulation of 82 billion USDT. Tether it happened. In April, Allaire blamed America’s war on crypto and the banking crisis for USDC’s declining market cap.
