- The company had previously ruled them out entirely because of concerns about a technical default in the U.S.
- But at the same time Circle wants to keep repurchase agreements (repos) with major banks in reserves
- The firm has already invested about $700 million in bonds maturing in July and August
U.S. Treasury bonds are back in the USDC reserve. Circle invested in the bonds a portion of the collateral that is managed by the BlackRock fund.
When the issuer of USDC changed the structure of stablcoin reserves in early May. The bond portion was first significantly reduced and then removed from collateral altogether.
But yesterday, June 21, Circle CFO Jeremy Fox-Guin said during a phone call that the USDXX fund has begun to ramp up that position.. But at the same time, the company wants to maintain repurchase agreements.
As of this writing, the USDC reserves managed by BlackRock contain July 18 and August 8 settlement bonds totaling $700 million:
The “debt deal” obviously convinced Circle of the bonds’ reliability. Read more about this crisis, which fortunately did not happen, in our separate article: