An audit report published by Gant Thornton LLP on January 15 confirms Circle's claim that its stablecoin, USDC, is fully backed by fiat reserves.
The audit, conducted in accordance to the standards established by the American Institute of Certified Public Accountants, found that the total USD Coin (ticker symbol USDC) supply, as of December 31, 2018, totaled 251,211,148. The amount of US dollars held in Circle's custody accounts at that time totaled $251,211,209. In other words, USD Coins were over-collateralized by $61.
Launched in September 2018, USD Coin has now received three audit reports, all conducted by Gant Thornton LLP, and all confirming full fiat-backing. The last audit report, published December 14, attested that as of November 30, Circle's custody accounts held $180,192,792, while 177,190,279 USDC were in circulation. The first report, published in mid-November, attested that as of October 31, Circle's custody accounts held $127,412,240.89, while 127,408,827 tokens were in circulation.
More than proving adequate fiat-reserves, these audits allow insight into the relationship between fiat reserves, adoption, and peg to the dollar, which isn't always straightforward.
The USD Coin audits reveal an increase in USD Coin's circulation, alongside continued audit-confirmed fiat-backing. And adoption has only grown since the last audit. As of reporting, Etherscan shows that the supply of coins in circulation now totals more than 371 million. However, according to CoinMarketCap, the price of USD Coin has been somewhat volatile, at one time reaching a high of $1.09, but generally fluctuating between $1 and $1.04. Though not by any means an extreme fluctuation, cents on a dollar becomes increasingly significant when considering large sums of money.
Paxos has less than half the total number of coins in circulation compared to USD Coin, coming in at about 133 million – almost 30 million less than was reported in November. In contrast to USD Coin though, Paxos' stablecoin is almost always at roughly $1.01, only very occasionally fluctuating above or below that price. At one time in October, though, it did rise to a high of $1.10. Despite having four months of audits proving full fiat-backing, and a more stable price, Paxos has so far not been able to keep pace with USD Coin's success.
The Gemini Dollar's circulation appears to have a more expected relationship to its price. Of the three, Gemini has the lowest circulation, at a bit over 87.8 million, and the most significant price volatility – though it is worth nothing that the coin's instability has somewhat leveled out over the last month.