Shares of the steiblcoin issuer USDC have the largest collapse in history. It was caused by a competitor

Shares of Circle, which is the issuer of the second largest steiblcoin USDC, collapsed by more than 20% in trading on March 24. Its competitor, Tether, which issues the leading USDT steiblcoin by capitalization, announced that it had engaged a Big Four accounting firm to conduct the first-ever audit of its reserves.

For Circle, the collapse was the worst ever in trading, CNBC calculated. The company went public in June.

The securities of Coinbase, the main platform for the distribution of USDC, also became cheaper. They lost more than 11% of their value.

Tether is not traded on an exchange.

USDT is the most popular stablecoin on the market with a capitalization of $184 billion, according to CryptoQuant. However, it has been at the center of controversy for years as Tether promised transparency through quarterly "attestations" but never conducted a full formal audit, CNBC explains. This has caused many investors and regulators to worry that USDT reserves are not transparent or standardized enough.

Stablecoins are cryptocurrencies that are pegged in price to an underlying asset, most often the U.S. dollar, and are usually backed by dollar deposits, short-term Treasury bonds, and similar cash equivalents. Checks are just as helpful in making sure of this.

USDC, with a capitalization of $78.6 billion, is considered more "institutional," CNBC notes. This token undergoes an annual full audit by Deloitte and publishes monthly confirmations.

"The involvement of a Big Four firm underscores our commitment to give [investors] confidence that USDT is fully collateralized, highly liquid and managed to world-class risk management standards," Tether said in a statement.

This article was AI-translated and verified by a human editor