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The total supply of USDC has topped $1.8 billion, rising more than 250% since the beginning of 2020, likely spurred on by the explosion in DeFi's yield farming popularity (where liquidity providers are rewarded for staking stablecoins and other digital assets in DeFi protocols for use in loan issuance and other financial activities.) The acceleration in USDC issuance also may be powered in part by the August 27 release of USDC version 2.0, an upgrade that improved security by transitioning some administrative USDC-related tasks to on-chain processes and allowed integrated projects to pay gas fees for users when transacting with USDC. Also, it's supported by and easily obtained on Coinbase.

Dubbed USDC 2.0, USD Coin (USDC) has integrated what are called "meta transactions" natively to the dollar stablecoin platform. Now, users do not have to pre-fund their USDC-bearing wallets with ether (ETH) in order to send a transaction. Meta transactions allow USDC wallets and compatible applications to act as virtual "gas stations" by paying the associated mining fee that accompanies every Ethereum blockchain transaction. This [update] enables people to fund their non-custodial wallets with USDC and start using DeFi/dapps without also having to own ETH.

The US-based Bank Policy Institute (BPI) is raising concerns that a sizeable proportion of Circle's USDC stablecoin reserves could be parked at the Federal Reserve, despite Circle not having a central bank account. Since November, BlackRock has been managing about two-thirds of the reserve assets in a bespoke money market fund, the Circle Reserve Fund (CRF) , which invests mostly in U.S. short-dated Treasuries. The BPI claims that Blackrock has applied for the fund to access the Fed's overnight reverse repo (ON RRP) facility, which provides money funds and government-sponsored enterprises a standing option to invest overnight with the Fed at a fixed rate, currently 4.3%. This involves the fund buying Treasuries from the Fed, which are resold to the Fed at a future date at a slightly higher price. The net effect of the cash flows, with the transfer of money to the Fed, is not dissimilar to depositing the USDC reserve cash at the Federal Reserve. The use of the ON RRP by the CRF could effectively transform USDC into a "backdoor" synthetic central bank digital currency (CBDC) if all of the assets are parked there. https://bpi.com/will-usdcs-blackrock-money-fund-create-a-back-door-cbdc-give-usdc-an-account-at-the-fed-or-both/

The USDC stablecoin seems to be following USDT into murky waters. USDC lists monthly attestation reports by Grant Thornton LLP (https://www.centre.io/usdc-transparency), but where is the missing September 2020 USDC attestation? Why are there long irregular delays in the release of the attestation reports since September 2020? Where are March/April 2021 reports?

Circle, which along with Coinbase issues the USDC stablecoin, is coordinating with the US government and Latin America crypto exchange Airtm to route aid for Venezuelan healthcare workers through the Latin American country's government in exile. The US Treasury and Federal Reserve releases seized funds to the exiled government's account at a US bank. The exiled government then uses those funds to mint USDC. The USDC is then sent to Airtm Once the USDC stablecoins hit Airtm wallets, they go to Venezuela healthcare workers in the form of AirUSD, Airtm's own fiat-backed stablecoin. Recipients can then withdraw at banks, send the funds, or spend them online.

The Centre Consortium has blacklisted USDC addresses in response to law enforcement requests. Centre said it complies with all binding court orders that have appropriate jurisdiction over the organization. USDC runs on the Ethereum network, and a transaction on Etherscan indicates that, in the past, Centre has called "blacklist(address investor)" functions on addresses, essentially freezing all coins on them. When an address is blacklisted, it can no longer receive USDC and all of the USDC controlled by that address is blocked and cannot be transferred on-chain.

Circle has launched a mainnet protocol that lets users transfer its USDC stablecoin between Ethereum and Avalanche. Previously, Avalanche users who held USDC on Ethereum had to deposit their coins with a Circle partner or use a third-party bridge to transfer their USDC from one network to the other. The new Cross-Chain Transfer Protocol (CCTP) protocol appears to do away with this need for USDC bridges. Unlike a traditional bridge, it doesn't lock tokens sent to its contract. Instead, it completely destroys them and issues new tokens on the receiving network. Users can redeem these new tokens for bank deposits directly, by depositing the tokens with Circle or its partners.

USDC stablecoin issuer Circle announced that it will "cover any shortfall" caused as a result of the $3.3 billion in its funds held by the collapsed Silicon Valley Bank (SVB). Circle said it is legally obliged to "stand behind" USDC and will cover any shortfall using corporate resources-and external capital if necessary. USDC is currently collateralized 77% ($32.4 billion) with short-term U.S. Treasury Bills and 23% ($9.7 billion) with commercial bank deposits ($5.4 billion with BNY Mellon, $3.3 billion at SVB, and $1 billion at Consumer Bank). Circle also maintains USDC transaction and settlement accounts with Signature Bank.

Circle and Coinbase have announced an upgraded version of the USDC stablecoin - which is managed by the Centre Consortium - including the addition of so-called gasless sends. The "USDC 2.0" update will allow services that offer USDC support to pay transaction fees - known as gas on the Ethereum network - for their users. This allows developers to either provide that service themselves, or allows a third party service to pay the related fees, so developers can either pay the fees on behalf of the customer or present and deduct the fees in USDC. https://medium.com/centre-blog/centre-consortium-announces-release-of-usd-coin-version-2-0-37ee8b27e09b

Lars Ulbricht compared the smart contracts of the PayPal PYUSD and Circle USDC stablecoins. He found that they differ in terms of the degree and method of centralization and intervention. PYUSD's contract exhibits a more traditional approach with more control over the contract and the option to wipe accounts, while USDC enables a decentralization of minting whilst maintaining crucial control mechanisms. It is important to note that how these functionalities will be used will depend on the governance models employed by each organization. So while PYUSD seems to be just a little bit more centralized, the theoretical abuse possibilities don't differ too much from USDC.

Significant market volatility this week induced by the collapse of the FTX exchange has impacted stablecoins with many of them depegging temporarily. Tether's USDT temporarily declined to $0.97 on November 10 as redemptions reportedly surpassed $600 million over the previous two days. Circle's USDC fell to $0.977 very briefly. Both rapidly regained their pegs. Yesterday I reported that USDT had spiked down and USDC spiked up, but different sources tell different stories. Yesterday's USDC graphic sourced CoinMarketCap.com whereas CoinGecko.com tells a different story (see below). with USDC also spiking down like USDT did. In any case, lots of volatility!

Coinbase says the adoption of USD Coin has been "more conservative" outside of the United States, which it believes is a result of international currency conversion fees. The U.S. exchange said there is currently three times more USDC bought with U.S. dollars as compared to other currencies. The exchange said it is aiming to "build more on-ramps for users to access USDC," and will be waiving fees for all customers who buy or sell USDC using any fiat currency.

Coinbase announced that the platform will be "unifying USD and USDC order books," adding that "USDC order books will be merged under USD order books to create a better, more seamless trading experience with deeper liquidity for USD and USDC." USDC (aka USD Coin) is the stablecoin issued by Centre, a consortium of Circle and Coinbase. This may provide a 'more seamless' experience, but it also gets Coinbase out of a potential fiat liquidity crunch, in the wake of massive customer USD withdrawals during the current crypto crash.

Binance effectively banished USD Coin (USDC), the second-biggest stablecoin, from trading at its cryptocurrency exchange in favor of its own competing product. On Sept. 29, customers' holdings of USDC will be converted to Binance USD (BUSD). The same will happen with two smaller stablecoins: Pax Dollar (USDP) and TrueUSD (TUSD).  The action effectively removes USDC as a tradable asset on one of the most prominent perches in crypto, and creates a headache for Circle Internet Financial, USDC's issuer, as the company mulls an IPO.

Circle has introduced a new standard to streamline the process of launching its USDC stablecoin. The new "bridged USDC standard" allows developers to launch the token through a two-phase process. In the first phase, the third-party developer has control of the token contracts, and the token on the new network is backed by a native version on another network. In the second phase, Circle takes control of the contracts, and the token becomes backed directly by Circle's reserves. The second phase may not occur with all deployments. https://www.circle.com/blog/bridged-usdc-standard

The United Nations High Commission for Refugees (UNHCR), the Stellar Development Foundation, USDC stablecoin issuer Circle, and cross-border money transfer company MoneyGram have rigged up a system for sending aid directly to Ukrainian refugees using crypto-assets. The UNHCR delivers USDC hosted on the Stellar network, to a digital wallet that can be accessed via smartphone, even to people without bank accounts. The recipient then exchanges their USDC for local currency at any MoneyGram facility. Because the USDC is hosted on decentralized infrastructure and in the custody of individual wallet owners, funds cannot be withheld.

"USDC and other stablecoins are being adopted for many reasons, but one major benefit of stablecoins over traditional settlement infrastructure (e.g. Fedwire) is that they run on crypto-native payment rails that operate 24/7, 365. The heatmap below breaks down USDC activity by day of week. On-chain data show that USDC is mainly used during weekdays, but has some activity during the weekends when traditional infrastructure is largely unavailable."

The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) sanctioned Tornado Cash, a crypto-asset mixer that mixes potentially identifiable or "tainted" cryptocurrency funds with others, so as to obscure the trail back to the fund's original source. OFAC claims that Tornado Cash has been used to launder more than $7 billion worth of virtual currency since its creation in 2019. The sanctions mean U.S. crypto investors can no longer use Tornado Cash. 38 ETH addresses and 6 USDC addresses were added to OFAC's Specially Designated Nationals (SDN) list. Circle, the issuer of the USDC stablecoin, reportedly froze over $75,000 worth of USDC funds linked to those 6 USDC addresses. Several leading figures in the crypto industry expressed their concerns about the sanctions.

Circle CEO Jeremy Allaire announced that company will now provide weekly attestations concerning stablecoin USD Coin (USDC) reserves and liquidity. According to the latest week's figures, all $52.9 billion USDC in circulation are fully backed by cash ($12.8 billion) and short-dated U.S. Treasury securities ($40.2 billion expressed in terms of fair market value) held at U.S. regulated financial institutions on behalf of USDC holders. This weekly reporting is in addition to the the monthly attestation reports which, like Tether's, are published with long lags.  The last one (covering the accounts as of March 31, 2022) was published at the end of April.

USDC has gone live on the Stellar network. At launch, Stellar USDC is immediately available on Stellar's decentralized exchange, accessible to any Stellar account through integrated wallets (Lobstr, Solar, StellarPort, StellarX, and StellarTerm), and tradeable across Stellar's ecosystem of more than 9,000 assets including stablecoins like NGNT, BRLT, ARST, EURT, TZS and ZAR.