USDC doesn't keep its USD in "cash". Its claiming its got "commercial paper" backing it. ("Commercial paper" being a codeword for loans, the same 5-day / 9-day loans that make up an entity such as SWVXX). Or government loans, etc. etc. Its the same thing, but worse.
Its no more secure than an MMF as it is. In fact, due to the much weaker reporting guidelines, USDC is likely worse than an MMF like SWVXX.
No stablecoin promises "cash" holdings. Literally none. The best you've got in the cryptocoin world is MMF-like promises, except without any of the MMF regulations.
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There's no guarantees that USDC's backing of "commercial paper" has any good rating at all. What 5-day loans are USDC banking on? Is it Bank of America? Or is it a loan to Binance? No one knows.
> USDC has always been backed by the equivalent value of U.S. dollar denominated assets; USDC reserves are kept in the management and custody of leading U.S. financial institutions, including BlackRock and Bank of New York Mellon
Yeah, I know... what these companies are doing is absolute crap and I suspect that in the future this is going to lead to an even bigger crisis than what's happening right now in the crypto industry.
I suspect that this is a side effect of 1) being impossible to store large amounts of USD cash in a bank, at least without incurring into significant risks of losing it or actually even losing money over time due to negative interest rates and/or 2) being more lucrative to hold these paper products rather than keep everything strictly in cash, perhaps even also 3) lack of moral standards? I don't know.
I think this is even worse than what the traditional banks are doing and I'm completely against it. Especially due to the lack of transparency that you are mentioning.
Its no more secure than an MMF as it is. In fact, due to the much weaker reporting guidelines, USDC is likely worse than an MMF like SWVXX.
No stablecoin promises "cash" holdings. Literally none. The best you've got in the cryptocoin world is MMF-like promises, except without any of the MMF regulations.
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There's no guarantees that USDC's backing of "commercial paper" has any good rating at all. What 5-day loans are USDC banking on? Is it Bank of America? Or is it a loan to Binance? No one knows.
> USDC has always been backed by the equivalent value of U.S. dollar denominated assets; USDC reserves are kept in the management and custody of leading U.S. financial institutions, including BlackRock and Bank of New York Mellon