Coinbase, Circle to Move USDC Reserves Out of High-Risk Investments

USDC reserves will move out of the current higher-risk investment portfolio and into cash and short-term treasuries starting in September.

article-image

Source: Shutterstock

share

key takeaways

  • In July, Circle revealed that while most of USDC is backed by dollars, not all of its reserves are in cash
  • In August, Coinbase changed language on its website to clarify that USDC cash reserves are not kept entirely in a bank account

Centre Consortium, which includes Coinbase and Circle, has revealed that all of the assets backing USDC, the world’s second largest stablecoin, will be moved into cash and short-term treasuries. 

In July, Circle revealed that while most of USDC is backed by dollars, not all of its reserves are in cash. Some reserves are held in corporate bonds and commercial paper, Circle said. The report contradicted previous claims that USDC is backed dollar-for-dollar in cash. 

“This news makes sense,” said Matthew Gould, CEO and founder of Unstoppable Domains.

“USDC is the market leader for the safest and most compliant USD stablecoin. This move further solidifies that positioning.” 

In August, Coinbase changed language on its website to clarify that USDC cash reserves are not kept entirely in a bank account, as a previous statement suggested

The news comes after Tether revealed a breakdown of USDT reserves, of which only 2.6% are kept in cash. The remainder is a combination of secured loans, corporate bonds, crypto holdings and other investment vehicles. 

“USDC is trying to win market share and ‘kill’ them with transparency much demanded by institutional players,” said George Zarya, CEO at Bequant. “Liquidity in crypto is still dominated by USDT-based pairs and risk-weary traders can’t get through to it as they wont take USDT risk.” 

USDC reserves will move out of the current investment portfolio and into cash and short-term treasuries starting in September, Coinbase president Emily Choi said via Twitter

“The changes in the investment portfolio for USDC reserves began in May 2021 and will not extend past September,” wrote Choi. “Centre, alongside Circle, will ensure that the USDC investments revert back to a more conservative investment profile by the end of September.”

Users can exchange USDC for $1.00 to be deposited into a bank account at any time, Coinbase and Circle have said.

Want more investor-focused content on digital assets? Join us September 13th and 14th for the Digital Asset Summit (DAS) in NYC. Use code ARTICLE for $75 off your ticket. Buy it now.

Tags

    Decoding crypto and the markets. Daily, with Byron Gilliam.

    Upcoming Events

    Old Billingsgate

    Mon - Wed, October 13 - 15, 2025

    Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

    Industry City | Brooklyn, NY

    TUES - THURS, JUNE 24 - 26, 2025

    Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

    Brooklyn, NY

    SUN - MON, JUN. 22 - 23, 2025

    Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

    recent research

    Research Report Templates (19).png

    Research

    Suilend has grown into the top money market and liquid staking provider on Sui. STEAMM, Suilend’s Superfluid AMM, presents a compelling avenue for growing market share within Sui’s DEX landscape and revenue generation for the protocol. Suilend’s multi-product suite position it well for owning market share across key verticals. While current metrics across the Sui ecosystem are likely inflated due to Sui Foundation incentive programs, SEND trades at amongst the lowest multiples in the lend/borrow sector, suggesting that a bull case for continued growth in the ecosystem may be mispriced.

    article-image

    Decentralized money was a “very unpopular goal” when concepts were proposed in the ’90s, said Nick Szabo

    article-image

    Cove aims to deliver “risk-adjusted yield” through curated DeFi vaults

    article-image

    The best capital markets are open to the most people — and crypto capital markets are open to everyone

    article-image

    Post-conference musings on Firedancer, Kraken, Solana Mobile and Trump

    article-image

    Executives expect others to follow SharpLink Gaming’s lead in purchasing an asset that has surged this past month

    article-image

    After a weekend of tariff policy shifts, investors appear confident that trade deals are underway