• Fr. Sep 22nd, 2023

USDC Issuer Circle Rebalances Reserves Amid Debt Ceiling Crisis


Mai 12, 2023

• USDC Issuer Circle is taking precautionary measures to avoid potential lapses in the event of a US debt default by rebalancing its Treasury holdings.
• Treasury Secretary Janet Yellen warned that the US government could be unable to pay its bills by June 1st and could default on its debt at a later date.
• To prevent any such catastrophic fallout, Circle has adjusted its mix of reserves that back USDC by switching to short-dated US Treasuries.

Circle Rebalances Treasury Holdings Amid Debt Ceiling Crisis

Stablecoin issuer Circle is taking precautionary measures amid looming debt ceiling crisis with no agreement in sight. In order to avoid potential lapse in case of a US debt default, the firm has adjusted its mix of reserves that back their stablecoin, USDC, by switching to short-dated U.S. Treasuries which mature no later than May 31.

US Treasury Secretary Janet Yellen’s Warning

The news comes after U.S. Treasury Secretary Janet Yellen’s warning that the government could be unable to pay its bills by June 1st and could default on its debt at a later date, sparking widespread concern amongst financial institutions and investors alike.

Precautionary Measures Taken By Circle

In response, Chief Jeremy Allaire noted that Circle does not want to carry exposure “through a potential breach of the ability of the US government to pay its debts” and has thus taken steps to ensure safety for their users‘ funds by rebalancing their treasury holdings as well as switching them into shorter-term investments with maturities no longer than late May 2021.

White House Talks Conclude With No Agreement

Negotiations on raising the debt ceiling got off to a rocky start this week as White House talks concluded with no agreement between Republicans and Democrats over raising it – an action which must be taken in order for the country to avoid defaulting on national debt obligations.


Given the current unstable political environment within the U.S., Circle’s decision serves as an important reminder for other cryptocurrency businesses as well as traditional finance firms who are exposed against such risks – providing them with an example of how they too can take pre-emptive steps towards protecting themselves from potentially serious damage caused due to external factors outside their control.

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