The Financial Bubble Era Comes Full Circle - 0 views
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John Kiff on 10 Jul 22Matt Taibbi asks some tough questions about the sanctity of the reserve assets that back Circles USDC stablecoin, and the issue of bankruptcy remoteness. Circle is unlike some competitors, whose user agreements specifically spell out that reserves are, say, "fully backed by US dollars held by Paxos Trust Company, LLC," or "custodied pursuant to the Custody Agreement entered into by and between you and Gemini Trust Company, LLC." Those describe trust agreements, which are truly bankruptcy remote. However, Circle is not a trust, so customers are guarded only by protections afforded under state money transmission laws. However, Circle is only regulated as a money transmitter in the states where Circle has licenses, and the firm has obtained licenses only in those states were licenses are required. There are other reasons to be concerned as a USDC hodler, and I recommend reading the whole post.