Stablecoin issuer Circle Internet Financial has ditched all U.S. Treasury bonds from its USD Coin (USDC) backing reserves as part of precautionary measures to protect from a potential fallout from the looming U.S. debt ceiling showdown.
The Circle Reserve Fund, managed by global investment giant BlackRock, held all of its $24 billion of assets under management in overnight repurchase (repo) agreements as of May 30, according to the fund’s website.
This is a significant change since the end of April, when the fund held more than $30 billion in U.S. Treasury bonds, according to Circle’s monthly attestation. The last Treasury bond worth $4 billion among the fund’s holdings matured on Tuesday, the fund’s website showed.
The milestone is a result of Circle’s attempt to protect the $29 billion USDC stablecoin from potential turbulence on the bond market while U.S. lawmakers are scrambling for a deal to avert a government default.
The U.S. House of Representatives is poised to vote on a bill to raise the government’s ability to issue new debt on Wednesday evening.
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