The reserves of the USDC stablecoin will be reversed back to be cash holdings and U.S. treasury bills only, months after its issuer expanded the investment portfolio.
Centre, the organization that issues the $28 billion USDC crypto stablecoin backed by Coinbase and Circle, said in a blog post on Monday that it will now "hold the USDC reserve entirely in cash and short-duration U.S. Treasuries."
The move comes just a month after the firm detailed in a report in July that it expanded the investments for the USDC reverses since May.
In the attestation report for May published in mid July, Centre's auditing entity GrantThornton broke down the investment portfolio for the USDC's $22 billion reserves at the time.
In addition to cash and U.S. treasury bills, the firm diversified the reserves with the inclusion of Yankee Certificate of Deposit (13%), Commercial Paper (9%), Corporate Bonds (5%) and Municipal Bonds & US Agencies (0.2%).
In July, Coinbase quietly changed the description for USDC on its website and dropped the wording that previously said each USDC was backed by one US dollar "in a bank account."
Emily Choi, chief operating officer of Coinbase, said in a Tweet that while the changes in the investment portfolio for USDC reserves started in May 2021, it "will not extend past September."
"So to be clear, the next 2 attestation reports (June and July) for USDC reserves will show a diversified investment portfolio. This will reverse beginning with the month of August," Choi added.