Circle, a Goldman-funded startup, released a report that indicated that the company behind USDC, a stablecoin pegged to US dollars, has sufficient capital to support each token one-to-one.
The attestation of conformity, issued by the accounting firm Grant Thornton LLP, demonstrates that Circle held — at one point — fiat reserves that are slightly above the number of issued and outstanding USDC tokens in circulation.
Grant Thornton was founded in Chicago in 1924. It is the US arm UK-based Grant Thornton International Ltd., which is a top five professional services firm.
The entire report is only two pages long and can be accessed via Circle’s website. It shows that the company had just $127,412,240 at one point, on October 31, 2018, 11:59 UTC. This is in contrast to the 127,408,827 USDC coins currently in circulation. Circle’s assets were then found to be almost equal to the USD token’s fully-backed balance as of that date.
Grant Thornton released a new report that stated that it doesn’t have any opinion on the effectiveness of USDC’s internal controls.
Tether’s Impact on the Crypto Market
Circle’s initiative has also been a success in recruiting a major accounting company, which can be held responsible by third parties for financial data, to audit a crypto token. Due to the rapidly evolving cryptocurrency industry and the lack of regulatory oversight, the risk of an audit of USDCs, or any other crypto assets, is too high for accounting firms.
Circle seeks to reassure investors that its cryptocurrency is backed by U.S. dollars after Tether’s major stablecoin, once represented over 17 percent of all crypto daily volumes, has been dogged by speculation that it holds insufficient capital to support its $2.6 billion market cap of USDT.
In addition, Circle’s New York BitLicense offers a fully audited alternative, in contrast to Tether which has been the subject of controversy and regulatory scrutiny.
The topic of stablecoins is generating buzz in the crypto community these days. These assets are used primarily for trading and hedging on global crypto capital markets.