The financial services company Circle, which has been evolving with its major USDC reserves, reportedly revised its reserves with the intention to escape the possibility of being troubled by the US government’s potential debt default. Jeremy Allaire, the Chief Executive Officer of Circle said in an interview that the platform has backed most of the circulating USDCs to support the short-term US Treasurys.
Notably, the Circle Reserve Fund had been managed by the investment management company BlackRock. Though the executives of the platform were reluctant to comment on the matter, it was revealed that the agreement that currently unites Circle with BlackRock would expire by the end of May.
Positioning Circle’s portfolio in a critical condition, Allaire declared that the company no longer holds Treasuries maturing after the first days of June, adding that Circle didn’t “want to carry exposure through a potential breach of the ability of the U.S. government to pay its debts.”
According to the report, Treasury Secretary Janet Yellen has posited that the authority would be forced to make “decisions” if Congress doesn’t raise the federal debt limit. The report also provided a picture of the impending danger to which the United States could slip in the coming weeks; President Joe Biden and the Republicans have been conflicted over raising the $31.4 trillion borrowing limit.
It is noteworthy that Circle Reserves’ vulnerability has been identified in March following the fall of the Silicon Valley Bank (SVB). It was recognized that almost $3.3 billion of the company’s reserves that backed USDCs were held at SVB, resulting in the loss of the stablecoin’s 1-1 peg to the dollar.
Currently, as per the data provided by CoinMarketCap, USDC is traded at $1.00, with a 0.02% surge in the last 24 hours. The stablecoin holds a 24-hour trading volume of $4,569,642,913 with a live market cap of $30,129,959,020.