Circle, the business responsible for the USDC stablecoin, recently published a study titled "State of the USDC economy." In the research, Circle highlighted the significance of dollar-backed cryptocurrencies and made an effort to ease concerns over the health of its reserves.
Circle stated in the report that was released on Tuesday that it is "committed to supplying USDC owners and the public at large with accessible, timeously disclosing on the how to lessen risk while maintaining cash flow in the USDC reserve.
Circle has announced that it will now collaborate with Deloitte, the accounting company that Coinbase has selected to maintain the integrity of its proof of reserves.
Binance was under the impression that the "Big Four" accounting firms — known as Deloitte, Ernst & Young, KPMG, and PricewaterhouseCoopers — were "currently unwilling" to conduct a proof-of-reserves audit for a private cryptocurrency company, according to a spokesperson who spoke to Blockworks in December.
Even though Circle is privately owned, the company had planned to enter the public market by forming a unique purpose acquisition partnership (SPAC) with Concord. However, after the failure of FTX, Circle decided to scrap those plans and instead focus on other initiatives.
"We are disappointed the proposed transaction timed out," Circle CEO Jeremy Allaire said in a statement at the time of the news. "However, becoming a public company remains part of Circle's core strategy to enhance trust and transparency, which has never been more important."
Circle, which had collaborated with the company Grant Thornton for its audits for many years, has decided to transfer auditors when many accounting firms have shown concern when conducting audits of cryptocurrency companies.
It was alleged that Mazars Group and Armanino dropped their crypto clients over the previous month. According to reports, Mazars decided to suspend offering proof-of-reserves auditing services to the cryptocurrency exchanges KuCoin, Binance, and Crypto.com because of "concerns regarding the way the public understands these reports." Mazars was responsible for conducting these audits.
Controlling the US Dollar Reserves
The publication of Circle's research comes when the industry still waits for more regulatory direction from Congress. According to the opinions of many experts, this guide will most likely initially be provided to the stablecoin business.
Katherine Dowling, general attorney and chief compliance officer at Bitwise Asset Management, stated in an interview with Blockworks last week that "the first Congressional focus point will undoubtedly be stablecoins."
Dowling stated that regulation of stablecoins, namely regarding reserve monitoring and liquidity standards, has been a long time coming. He referred to the bipartisan measure parliamentarians attempted to enact during the last session but were unsuccessful.
According to Dowling, legislation about stablecoins can be an early success for members of Congress who want to establish some crypto policy. A significant amount of the groundwork has already been completed.
"There is a general feeling that something needs to be done here," Dowling said. "Irrespective of members of congress leaning towards or opposed to crypto, or the learning curve, there is a sense that something must be done here."
Allaire concurred, pointing out in the article that Circle is ready on the regulatory front and is closely following events.
Allaire wrote, "policymakers worldwide are honing their concentrate, heralding in much-needed regulatory oversight for how trustable virtual currencies can be monitored by banking and financial regulatory agencies coherently and harmoniously.