It’s worth mentioning USDC (Circle) reserves have never been audited, and they don’t even claim to hold dollars anymore (https://archive.today/2021.07.12-223553/https://www.ft.com/c...):

> Until March 2020, the attestations said USDC was backed by dollars, held in government-backed US depository institutions. After that, they said the reserves were held at institutions and in “approved investments”, but did not give precise details about what those investments were. By June, it changed the wording on its website from “backed by US dollars” to “backed by fully reserved assets”.

I always wondered if the USD based stablecoins just hold each other's coins in lieu of cash. It's like an infinite money glitch if it's circular.

This is what is happening to an extent, however the reserve requirements do not allow undercollaterization so you can’t print more value than you put in. A large slice of DAI is USDC.

Or like governments issuing bonds in foreign denominations.

The thing I never understood was why they didn't just invest in treasuries. Yield on the US 10-year is currently north of 3.3%, closer to 2% for a while. That's under inflation, but if you're a small start-up holding 100s of millions or billions of other people's money, that's enough to hit screw-it money in a few years without the constant fear of things going terribly wrong.

> holding 100s of millions or billions of other people's money, that's enough to hit screw-it money in a few years without the constant fear of things going terribly wrong.

so, you can have that honest 2% per year for several years or you can just take it all almost immediately. History as well as crypto today is pretty clear about what humans prefer. Absent the "take it all immediately" option people do though go for the 2% option. So if you see that they can go for such an option and yet haven't - i.e. they think they have a much better option than to earn easy 2% off somebody's billions (what can be better than that?) - that is a clear sign what option they really chose :)

You wouldn’t want to hold 10 year bonds, way too much duration risk. 30 day T-Bills is what they’d want to hold to minimize risk.

They claim most of it’s in T-bills.

This doesn't seem to be true, could you help me see what I'm missing?

USDC has been audited yearly since 2018 as part of Circle's financial statements, with years 2020 and 2021 publicly available with the SEC: https://www.circle.com/blog/how-to-build-trust-usdc-audits-a...

Circle also does monthly attestations - independent, signed reviews by third party accountants - on USDC holdings. Those are available here: https://www.circle.com/en/usdc#transparency

I looked and the April '22 attestation seemed fine.

Even the FT article seems to walk back its claims about changes in the attestations as worrying, seems like their source actually is more concerned about digital currencies in general:

> “The problem to me isn’t the specifics of any one attestation, it’s the fundamental workings of these kinds of systems,” said Grey.