Goldman-funded startup Circle released yet another audit report that indicates the company behind US dollar-pegged stablecoin USDC does possess sufficient capital to back each individual token on a 1:1 basis.
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 February 28, 2019, the company held a little over $236,939,216 compared to 236,917,932 USDC coin in circulation. Compared to the previous reports, the figure nearly doubled from $127 million in November but was down 23 percent from $307 million reported earlier in January’s report.
The “attestation report” aims to dispel any doubts and reassure investors that its cryptocurrency is backed by US dollars. The move is important due to nagging questions around Tether’s major stablecoin, which has been dogged by speculation that it holds insufficient capital to support its over $2.6 billion market cap of USDT.
The audit report, 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.
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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 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.
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.