📣 Coming soon

Security Token Market's crowdfund is going live on Securitize Markets on July 6th.

Securitize Logo

What Makes Stablecoins Like USDC Stable?

And Why Full-Reserve Stablecoins Are Optimal For Investors

Jun 23, 2022

Simply put, stablecoins are digital assets that use outside capital to stabilize unit price. For instance, USD Coin (USDC) stabilizes its unit price (with each unit equal to $1) by collateralizing USDC with U.S. Dollars (USD) and short-term government obligations denominated in USD. This full-reserve collateral keeps USDC stable and redeemable on demand.

USDC is backed 1:1 with short-term U.S. Treasuries and cash equivalents, which are managed by BlackRock, custodied by the Bank of New York Mellon, and have been attested to monthly by leading global accounting firms like Grant Thornton since 2018. Additionally, the issuer of USDC, Circle, publishes the results of its company audits annually, including all USDC reserves.

Using public blockchains to record and verify stablecoin transactions removes the need for traditional counterparties and reduces the cost of moving money from point A to point B. While many stablecoins use emerging blockchain technologies to make the user experience faster and easier, asset management best practices remain an important part of ensuring liquidity. For this reason, full-reserve stablecoins like USDC remain optimal for investors.

“Old-fashioned, reserve-backed stablecoins such as USDC continue to be the only viable digital dollars we work with.”

— Adil Abdulali, Chief Investment Officer at Securitize Capital

While there remain market, liquidity, and regulatory risks associated with emerging technologies and the financial instruments they support, USDC has proven to offer a more stable building block solution for firms developing modern financial services because of its full-reserve status. This demonstrable transparency and auditability offers more assurance that USDC remains liquid and redeemable on demand. So, when USDC holders choose to transact or invest, they experience near-instant settlement, lower fees, and 24/7 accessibility on the frontend while trusted asset managers and custodians maintain liquidity on the backend.

To learn more about digital asset management solutions that include stablecoins like USDC, subscribe for updates below.

Subscribe for Updates

© 2022 Securitize, LLC
All rights reserved
info@securitizemarkets.io
Check the background of Securitize Markets on Finra BrokerCheck.

Securities are offered through Securitize Markets, LLC, (“Securitize Markets”) a registered broker-dealer and member FINRA/SIPC. Neither Securitize Markets, nor any of its affiliates provide any investment advice or make any investment recommendations to any persons, ever, and no communication through herein or in any other medium should be construed as such. Securities offered on the Securitize Markets ATS have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. Assets listed herein, such as digital assets or tokens using blockchain, are speculative, involve a high degree of risk, are generally illiquid, may have no value, have limited regulatory certainty, are subject to potential market manipulation risks and may expose investors to loss of principal. Investments in private placements, start-up investments in particular, are also speculative and involve a high degree of risk. Investors must be able to afford the loss of their entire investment. Eligibility to buy and sell securities on the Securitize Markets ATS is determined by Securitize Markets in its sole discretion. Offers to sell, or the solicitations of offers to buy any security can only be made through official offering documents that contain important information about risks, fees and expenses associated with the applicable securities available for trading on the Securitize Markets ATS. Investors should conduct their own due diligence, not rely on the financial assumptions or estimates displayed herein, and are encouraged to consult with a financial advisor, attorney, accountant, tax advisors, and any other professional that can help you to understand and assess the risks associated with any investment opportunity. Past performance is not indicative of future results. Neither the Securities and Exchange Commission nor any federal or state securities commission or regulatory authority has recommended or approved any investment or the accuracy or completeness of any of the information or materials provided herein or through any references/links herein. Any financial projections or returns shown herein are provided by the issuer of the relevant security and Securitize Markets has not verified the accuracy. Further, there can be no assurance that any valuations provided by issuers are accurate or in agreement with market or industry valuations. Securitize Markets and its affiliates make no representations or warranties as to the accuracy of such information. Securitize Markets may collect certain information about you that helps us comply with various securities regulations and rules and the USA PATRIOT Act, a Federal law that requires all securities firms to obtain, verify, and record information that identifies each applicant. The information also helps us more fully understand your investment profile and identify what types of investments or strategies may be suitable for you. The term “Investors” used on this website, typically refers to accredited investors where applicable. Please note: if we cannot verify the information you provide, we may be required to restrict or deny your account. Trading during Extended Hours Trading Sessions carries unique risks, such as greater price volatility, lower liquidity, wider bid/ask spreads, and less market visibility, and may not be appropriate for all investors. There is no guarantee that a diversified portfolio will enhance overall returns, outperform a non-diversified portfolio, or prevent against loss. By accessing this site and any pages thereof, you agree to be bound by our Terms of Service and Privacy Policy.