USD Coin (USDC), Circle's dollar-pegged stablecoin, seemingly lost one of its biggest competitive advantages over its main rival, Tether (USDT).

Major crypto exchange Coinbase made an important alter on the USD Coin page on its website post-obit an audit that revealed that non all of USDC's reserves were held in cash. This ran reverse to the previous argument that "each USDC is backed by 1 U.Southward. dollar held in a bank business relationship."

Coinbase visitors are now greeted with a statement that says USDC is "backed past fully reserved assets" when they enter the USD Coin webpage. This new claim states:

"Each USDC is backed by one dollar or asset with equivalent off-white value, which is held in accounts with The states regulated financial institutions."
Coinbase changed the promotional textile for USDC. Source: Bloomberg

USD Money stands as the eighth-largest cryptocurrency with a total marketplace capitalization of over $28 billion. USDC is too the 2nd-largest stablecoin later Tether, which has almost $63 billion in full assets, according to its latest Consolidated Reserves Report.

Since its inception, USDC has soared equally a stablecoin fully backed by United States dollars. On the other hand, Tether has institute itself in hot water with regulators on more than one occasion due to undisclosed commercial paper accounting for almost one-half of USDT'south total reserves.

Withal, an inspect past multi-national tax advisory firm Grant Horton showed that 61% of USDC'south reserves were held in greenbacks and greenbacks equivalents, while ix% of the reserves were held in commercial paper. The audit written report defines cash as deposits at banks and Government Obligation Money Market Funds, while cash equivalents are defined as securities with an original maturity less than or equal to 90 days.

The report revealed the USDC reserves include Yankee certificates of eolith and U.S. Treasuries and certainly are non "fully backed by U.Southward. dollar held in a bank business relationship." According to Bloomberg, the diction for the USD Money on the website was changed the day the mainstream media contacted Coinbase about the written report and related marketing material.

A Coinbase spokesperson told Cointelegraph that each USDC is backed past $1 or asset with equivalent fair value:

"Users tin can always redeem 1 USD Money for Usa$1.00. Nosotros take added additional detail to our website for customers to empathise more near USDC reserves."

Related: Tether promises an audit in 'months' every bit Paxos claims USDT is not a real stablecoin

Circle, the company that oversees USDC in partnership with Coinbase under The Middle Consortium, recently announced its plans to go a total-reserve national digital currency bank in the United States. Circumvolve CEO Jeremy Allaire said the company is willing to operate under regulators' supervision and take a chance management requirements.

Equally part of the announcement, he said that USDC will grow to "hundreds of billions of dollars in circulation" continuing to support high-trust economic activity and will become a popular tool in fiscal services and internet commerce applications.