{"id":78601,"date":"2023-05-11T14:55:24","date_gmt":"2023-05-11T11:55:24","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=78601"},"modified":"2025-09-11T06:18:12","modified_gmt":"2025-09-11T03:18:12","slug":"circle-increases-stake-in-us-treasury-bills-amid-us-default-risk","status":"publish","type":"post","link":"https:\/\/u1f987.com\/en\/circle-increases-stake-in-us-treasury-bills-amid-us-default-risk\/","title":{"rendered":"Circle increases stake in US Treasury bills amid US default risk"},"content":{"rendered":"<p>The issuer <a href=\"https:\/\/u1f987.com\/en\/news\/what-is-the-usdc-stablecoin\">USD Coin (USDC)<\/a> Circle has revised the collateral structure of the stablecoin in favour of short <span data-descr=\"US Treasury bills\" class=\\\"old_tooltip\\\">T-Bill<\/span> to mitigate potential technical default risk in the United States. This was stated by Circle&#8217;s CEO Jeremy Allaire, according to <a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2023-05-10\/crypto-s-circle-usdc-says-concerned-about-us-debt-ceiling-default-risk#xj4y7vzkg\">Bloomberg<\/a>.<\/p>\n<p>The situation has intensified amid a lack of progress on raising the US debt ceiling. A meeting between leaders of both parties in the House and Senate with President Joe Biden proved unproductive.<\/p>\n<p>The US Treasury&#8217;s funds could run out by June 1, 2023.<\/p>\n<p>According to Allaire, Circle has disposed of securities maturing after early June. The company does not want to expose itself to the risk of &#8216;the US government&#8217;s potential default on its debt obligations&#8217;.<\/p>\n<p>According to the latest data, the current treasuries on Circle&#8217;s balance sheet mature no later than May 31.<\/p>\n<p>In the last six months, the aggregate market value of USDC has fallen by 31.7% \u2014 from $44.1 billion to $30.1 billion, according to <a href=\"https:\/\/www.coingecko.com\/en\/coins\/usd-coin\">CoinGecko<\/a>.<\/p>\n<p>In April 2023, Allaire <a href=\"https:\/\/u1f987.com\/en\/news\/circle-ceo-attributes-usdcs-decline-in-market-capitalization-to-regulator-actions\">described<\/a><strong> <\/strong>regulatory actions against crypto firms as the main factor behind the stablecoin&#8217;s capitalization.<\/p>\n<p>Beyond stringent regulatory measures, the banking crisis also affected Circle&#8217;s stake in <a href=\"https:\/\/u1f987.com\/en\/news\/us-rescue-saves-svb-and-signature-bank-depositors-stablecoins-narrow-the-depegging\">loss-stricken SVB<\/a>, which accounted for about 8% of the total cash reserves underpinning USDC&#8217;s value.<\/p>\n<p>On March 11, amid the collapse of the institution, the stablecoin temporarily <a href=\"https:\/\/u1f987.com\/en\/news\/usdc-loses-peg-to-the-dollar-amid-svb-collapse\">lost<\/a> its peg to the US dollar. Later Circle <a href=\"https:\/\/u1f987.com\/en\/news\/circle-reassures-on-resolving-usdc-banking-support-issues\">stated<\/a> that the issues with the asset&#8217;s banking backing were resolved.<\/p>\n<p>Earlier, Circle<a href=\"https:\/\/u1f987.com\/en\/news\/circle-launches-cross-chain-usdc-transfers-between-ethereum-and-avalanche\">launched<\/a> a solution for transfers of USDC between Ethereum and Avalanche.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The issuer of USD Coin (USDC), Circle, revised the collateral structure of the stablecoin in favour of short US Treasury bills to mitigate potential technical default risk.<\/p>\n","protected":false},"author":1,"featured_media":78602,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"1","cryptorium_level":"","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[1220,1224,807,910],"class_list":["post-78601","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-circle","tag-macroeconomics","tag-stablecoins","tag-usdc"],"aioseo_notices":[],"amp_enabled":true,"views":"16","promo_type":"1","layout_type":"1","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/78601","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/comments?post=78601"}],"version-history":[{"count":1,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/78601\/revisions"}],"predecessor-version":[{"id":78603,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/78601\/revisions\/78603"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media\/78602"}],"wp:attachment":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media?parent=78601"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/categories?post=78601"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/tags?post=78601"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}