Circle Has Enough Dollars to Back its Stablecoin, Says a Top 10 Accounting Firm

Goldman-funded Startup Startup A company operating within its first stage of investing is known as a startup. While startups may give the impression that the company must be new, that is not always the case.Many companies can have this designation after nearly three years of existence. Typically, a company exits the startup status after a period between 3 to 5 years or after successful funding rounds where capital is acquired. Startups tend to derive out of the belief that there is a demand for a service or product which is c A company operating within its first stage of investing is known as a startup. While startups may give the impression that the company must be new, that is not always the case.Many companies can have this designation after nearly three years of existence. Typically, a company exits the startup status after a period between 3 to 5 years or after successful funding rounds where capital is acquired. Startups tend to derive out of the belief that there is a demand for a service or product which is c Read this Term Circle released a report that indicates the company behind US dollar-pegged Stablecoin Stablecoin Unlike other cryptocurrencies like Bitcoin and Ethereum, stablecoins are cryptocurrencies that have been designed to keep a stable value. Placing a greater emphasis on stability over volatility can be a huge draw for some investors. Many individuals can be turned off from large swings and uncertainty presented by cryptos relative to other traditional assets.Stablecoins control for this volatility by being pegged to another cryptocurrency, fiat money, or to exchange-traded commodities, including Unlike other cryptocurrencies like Bitcoin and Ethereum, stablecoins are cryptocurrencies that have been designed to keep a stable value. Placing a greater emphasis on stability over volatility can be a huge draw for some investors. Many individuals can be turned off from large swings and uncertainty presented by cryptos relative to other traditional assets.Stablecoins control for this volatility by being pegged to another cryptocurrency, fiat money, or to exchange-traded commodities, including Read this Term USDC does possess sufficient capital to back each individual token on a 1:1 basis.

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.

Founded in Chicago in 1924, Grant Thornton is the US arm of UK-based Grant Thornton International Ltd, a top five professional service firm.

The entirety of the report, available via Circle’s website, consists of a mere two pages. It shows that at a single snapshot point on October 31, 2018, at 11:59 PM UTC, the company held a little over $127,412,240 compared to 127,408,827 USDC coin in circulation. The firm then concluded that Circle’s assets almost match the balance of its fully-backed USD token as of the same date.

The new report released by Grant Thornton, however, stated that the audit firm doesn't express any opinion about the effectiveness of USDC’s internal controls.

Tether’s Implications for the Crypto Market

Onboarding a major accounting firm, which can be held accountable by third parties for financial information, to engage in an audit of a crypto token is also a notable success for Circle’s initiative. The developing nature of the cryptocurrency industry, combined with the lack of regulatory oversight, makes the potential risk associated with a comprehensive audit of USDCs or any other crypto asset too high for accountancy 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. The major application for such assets has been as a mechanism for trading and hedging in global crypto capital markets.