Coinbase Reverses Decision on USDC Stablecoin Backing

Coinbase President Emilie Choi announced that the USDC stablecoin will return to being fully backed by U.S. dollars by the end of September.

This decision comes after criticism over a July attestation report, which revealed that only 61% of the funds providing price stability for the USDC stablecoin were backed by 'cash and cash equivalents'. This was a departure from previous statements that every USDC is 'backed by a dollar in a bank account.'

The May reporting period covered $22.6 billion in USDC in circulation, with Circle diversifying its holdings into a broader range of investments to pursue a higher rate of return.

'Could Have Been Clearer'

Circle has 'previously said that every USDC is backed by a dollar in a bank account,' Choi admitted. '[O]ur language could have been clearer here.' The company acknowledged that they should have moved faster to update statements on their website.