Circle Stablecoin USDC is fully covered by bank reserves
Circle has announced that it has engaged an independent accounting firm, Grant Thornton LLP, to review through monthly reports the dollar reserves Circle maintains to cover the stablecoin USDC. As a result of the first report, Grant Thornton LLP concludes that the Circle Dollar is fully covered with reserves of U.S. dollars.
Grant Thornton LLP, the US subsidiary of Grant Thornton International, announced in its November 16 report that Circle held USD 127,412,240.89 in custody as of October 31, 2018, fully covering the USDC 127,408,827 tokens in circulation at that time. According to the results, Circle actually has about 4,000 dollars more than it has in tokens on its accounts than it has spent on USDC.
In the report, Grant Thornton states that “the audit was conducted in accordance with certification standards established by the American Institute of Certified Public Accountants,” which means that “the nature, timing, and extent of the procedures selected will depend on our judgment, including an assessment of the risks of material misstatement of the reserve account information, whether due to fraud or error.
The report states in concrete terms:
Our examination was conducted in accordance with the certification standards established by the American Institute of Certified Public Accountants. These Standards require that we plan and perform the audit to obtain reasonable assurance whether the reserve account information in the attached reserve account report is presented fairly, in all material respects, based on the criteria set out in the reserve account report. […] The nature, timing and extent of the procedures selected depend on our judgment, including an assessment of the risks of material misstatement of reserve account information, whether due to fraud or error.
In assessing the risks of material misstatement, we have considered the internal control relevant to the preparation of the related reserve account report and the reserve account information in the related reserve account report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of such internal control. Accordingly, no such opinion will be delivered. We believe that the evidence we have received is sufficient and appropriate to provide a reasonable basis for our opinion.
Grant Thornton LLP further concludes that the information provided by Circle is true and accurate:
In our opinion, the reserve account information in the attached reserve account report at 23:59 UTC on 31 October 2018 is correctly presented in all material respects on the basis of the criteria set out in the reserve account report.
Other stablecoin issuers such as Gemini and Paxos have also published certificates from auditing firms to cover their stablecoins in recent weeks. Even if these are not complete audits, they are in contrast to the reserves of Tether, currently the largest stablecoin.
The controversial company submitted a letter earlier this month from Deltec Bank and Trust Limited demonstrating that it has a “portfolio present value” of $1.8 billion, although it is unclear whether it is targeting cash or other assets.
