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Comment by xur17 | Hacker News Reader

The good news is that USDC has 74% of their assets in short dated US treasuries (weighted average duration is 36 days). Even if they had to sell all of their treasuries TODAY, they'd only be looking at a ~0.4% haircut (assuming an efficient market for treasuries, which should be close to true).

Definitely not a good situation, but they're in a lot better position than SVB.

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> The good news is that USDC has 74% of their assets in short dated US treasuries (weighted average duration is 36 days).

Do you have any idea what kind of yield they get on these and what happens to that money? I've never been able to find any info about that.

This link [0] is useful for getting context on what backs USDC, and this link [1] shows what backs the 74%. Looks like an average yield of ~4.4%?

[0] https://www.circle.com/en/transparency

[1] https://www.blackrock.com/cash/en-us/products/329365/

They get 4.4% yield and that goes back to shareholders as equity in the company

I've also been under the (possibly incorrect) impression that the majority of Circle's dealings are with exchanges like Coinbase — parties who are probably willing and able to play some inside baseball in terms of dealing with duration mismatch and waiting out the feds.

Edit: Yeah, they are very strict with who they interact with — individuals cannot exchange their USDC for dollars directly with Circle: https://www.circle.com/en/legal/acceptable-use-policy.

> I've also been under the (possibly incorrect) impression that the majority of Circle's dealings are with exchanges like Coinbase

Circle belongs to Coinbase AFAIK.

EDIT: ah I was wrong, after reading the comment below I googled and Coinbase+Circle created the "Centre" venture and they're 50/50 in it. And Centre is the company which launched the USDC stablecoin. So Coinbase doesn't own Circle but owns 50% of Centre.

Also, while USDC is like a deposit, legally it isn't. So they are under no obligation to produce USD in exchange on demand. They can (and have) shut redemptions. So they could just wait 36 days for those treasuries to mature instead of taking even that small 0.4% haircut.

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