Stablecoin issuer Circle has reportedly adjusted its treasury reserves to mitigate the risk of US debt defaults.
Amid the ongoing banking crisis in the United States, Circle CEO Jeremy Allaire stated on May 10 that the company has altered the mix of reserves backing its USD Coin (USDC) by transitioning to short-dated US Treasurys to sidestep potential involvement in a US debt default. Allaire explains that Circle no longer holds Treasuries with maturities beyond early June to minimize debt exposure.
„We don’t want to carry exposure through a potential breach of the ability of the U.S. government to pay its debts,” the executive said.
The Blackrock-managed Circle Reserve Fund reveals holdings maturing no later than May 31.
Treasury Secretary Janet Yellen recently indicated that the government would have to make „decisions” if Congress fails to raise the federal debt limit. The $24 trillion Treasury market and the global financial system could experience significant disruption if the cou
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