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That is definitely not how USDC is set up. The creator takes 1 USD, and gives back 1 USDC and vice versa. In this case, some of the USD held at SVB disappeared,
by khold_stare 4y ago
That is definitely not how USDC is set up. The creator takes 1 USD, and gives back 1 USDC and vice versa. In this case, some of the USD held at SVB disappeared, so Circle has less money for the USDC -> USD redemptions. There needs to be a 1:1 backing, otherwise a stable coin is just smoke and mirrors.
- TekMol 4y agocreator takes 1 USD, and gives back 1 USDC and vice versa How do they make money then?
- humanizersequel 4y agoShort term treasuries. They're a liquidity provider for the US government.
- true_religion 4y agoTransaction fees I think?
- nikanj 4y agoThey invest the USD. If the investments work out, they keep the profits. If they don’t, the customers just got crypto’d