Circle, the issuer of USD Coin (USDC), has revised its stablecoin collateral structure to include short T-Bills, in an effort to protect against the potential of a US technical default, according to CEO Jeremy Allaire.
This comes as a result of the recent lack of progress in the issue of raising the US national debt limit, as leaders of both the House and Senate failed to reach an agreement with President Joe Biden.
Treasury funds may run out by June 1, 2023, and as such, Circle has removed all securities maturing after June from its balance sheet, Allaire stated.
The total market value of USDC has fallen by 31.7% in the last six months, from $44.1 billion to $30.1 billion, according to CoinGecko.
In April, Allaire cited enforcement actions against crypto firms as one of the main factors for the reduction in stablecoin capitalization. Additionally, Circle’s share in the collapse of SVB, which accounted for 8% of the total cash reserves underlying the value of USDC, has also had an impact.