Does Circle keep enough dollars on hand to buy back every USDC? Or do you run a fractional reserve? How much money is that total? What do you do if you have as many USDCs in circulation as you have dollars? Stop issuing them?
Circle holds one dollar for every dollar minted, we do not run a fractional reserve. The CENTRE Consortium holds minters (of which Circle is one) to strict auditing requirements. While this information is regularly published, you can see all minting and burning operations (as well as all transfers and other token operations) in realtime on the Ethereum blockchain. See etherscan: https://etherscan.io/address/0xa0b86991c6218b36c1d19d4a2e9eb... There are always as many USDCs in circulation as there are fiat dollars backing them up in traditional bank accounts. The only way minters produce more in a 1 to 1 manner is if someone wires traditional dollars in. Likewise, Circle will burn USDCs in a 1 to 1 manner as requests for traditional fiat dollar withdrawals are processed.
Thanks for the quick answer, this all makes sense. Does this get limiting at all, in terms of wanting to mint new coins and not having the capital to do so?
As you can imagine, Circle maintains fairly sophisticated minting operations able to execute around the clock. All that is necessary for coins to be minted is for Circle to broadcast a properly signed transaction.
Now, of course, Circle can't just mint a limitless supply because we have a minting allowance set by CENTRE. While CENTRE itself can't mint coins, they do operate a minting allowance system with around the clock availability which can grant Circle a additional allowance per a ruleset to effectively manage risk.
This might seem to be getting into the weeds a bit but support for multiple minters (Circle and Coinbase here for example) is a significant differentiator between USDC and other reserve backed stablecoins.
That's like saying isn't it a bummer I cant just print money out of thin air to buy stuff. The whole point is to give people faith and trust in the stablecoin exactly because thie issuance process relies on locking up 1 USD.
Circle works with a wide variety of regulatory agencies around the world. I'm not aware of anything the SEC has said publicly about USDC.
We work with a number of banking partners around the world but generally don't publicize this information.
Circle will begin publishing its USDC-related reports on centre.io after public launch. We have engaged Grant Thornton LLP to apply on a monthly basis certain agreed-upon procedures to assist management regarding the accuracy of USD reserve balances for the USD stablecoin tokens issued as set forth by the Company.
We will hold exactly one USD for one token. In the future, we may also invest these fiat funds in highly-liquid, AAA-rated fixed income securities.
The coins minted by both Circle and Coinbase are mutually fungible. You could acquire USDC from one and redeem it at the other. Support for multiple issuers is an important differentiator for USDC.
Why did you pick Ethereum instead of Ripple or Stellar? They have lower transaction fees and almost instant transfers in the seconds while their token contracts are way easier to setup and maintain if you are thinking on adding EUR, GBP, YEN, etc in the future. The only real advantage of Ethereum is their user base which is important but not the only decisive factor.
We considered a wide range of platforms before making a decision. At this point, however, Ethereum is really the only viable option particularly from a security and wallet support perspective. That said, we have been developing the technology in such a way that it can be adapted to other blockchains in the future should CENTRE choose to do that. However, while incredibly important, the contract implementation isn't nearly as much work as the legal, operational, risk and audit components necessary to connect the traditional financial system to cryptocurrencies in an open and compliant way. Should CENTRE choose to provide an implementation on another blockchain, much of those other components would simply apply with little modification.
Note I have no affiliation with Circle or Coinbase.
Ethereum tokens have far wider support among industry players and consumers, and a far larger set of compatible applications (e.g. state channel networks that allow near-free and instant ERC20 transactions, like Celer).
>>while their token contracts are way easier to setup
Setting up an ERC20 contract is literally a copy, paste, brand and broadcast job. In any case the technical cost of setup is not a factor that's relevant to large companies.
Thanks for the comment - I am still with Circle, and indeed we still use the bitcoin blockchain behind the scenes. We're also working on a smart contract platform called Spark. More to come on that in a bit.
I'm still a little lost on exactly what this is. The only two things I found under the technology link were node.js and SmartOS. Do you spin up SmartOS/node instances and somehow hook SIP to them? Can you give us a technical explanation?
Ameche is a Node.js PaaS that links deeply into the telco network to let developers put ‘apps’ in people's REAL calls and text conversations. Unlike Tropo and Twilio that require you to get a new phone number, Ameche is being connected with major phone companies around he world to let you hack your real mobile phone calls. With Ameche, you'll be able to build your own Google Voice on steroids without having to juggle multiple dialers or use their clumsy 'dial back' stuff.
On the technical front, Ameche speaks SIP/IMS on one side and Node.js on the other. We also have complete control over the media so you can inject little sound icons into your calls or create ad-hoc conferences while on a real phone call.
But the best part is how developers will be able to make money. With Tropo and Twilio today, you have to get a new phone number, build an app and then find a way to get people to use it. With Ameche, we're creating an OAuth flow that will allow users to add these apps to their phone service with a single click (like Facebook) and then have the developer collect revenue share from the carriers (like Apple does on the App Store). That way you can just write a cool app, list it on an app catalog or promote it yourself and then sit back and watch the cash roll in.
It's still early days so stay tuned to the blog. We'll be announcing the first set of Ameche-enabled carriers in the next couple months.
Thanks, much appreciated. So it is essentially a node.js VM with hooks that let you alter calls that already exist inside the big carrier networks.
My humble suggestion would be to get rid of all the marketing-speak on your website and lead with what you just wrote here. It is very frustrating to have to dig through statements about what this or that can mean to you without the basic understanding of what this is in the first place. Fire your marketing guy. ;)
> Do you spin up SmartOS/node instances and somehow hook SIP to them?
That's the impression I got too. The code sample suggests almost a middle layer? Regular users place phone calls as normal using regular phones, while this middle layer is triggered based on conditions and performs actions.
