USDC Stablecoin Boss Doesn't Want Risk If US Fails To Pay Debt

Circle boss refuses to take responsibility for the possibility of the US defaulting on debt. (Photo; Doc. Bitcoinist)

JAKARTA USDC Circle founder and CEO Jeremy Allaire admitted that he had prepared himself for the potential failure to pay off US debt. This was conveyed by Allaire in a statement to the media recently.

To Politico, Allaire stated that Circle no longer holds Treasury which is due after early June, as the stablecoin publisher does not want to risk a possible failure to pay off US government debt.

Circle published a USDC stablecoin that has a market capitalization of 30.1 billion US dollars (Rp443 trillion). According to data from BlackRock, there is no Treasury from the Circle Reserve Fund which is due after May 31.

Circle itself admits that BlackRock has been doing repo with the US Treasury over the past few months, as part of efforts to improve the liquidity management of the Circle Reserve Fund. It also provides additional protection for USDC reserves at a time when there is a possible failure to pay off US debt is unlikely.

Reporting from Blockworks, the US government risks failing to pay off national debt if Republicans and Democrats do not reach an agreement to increase debt limits. Both sides must raise debt limits to avoid defaults. US Treasury Secretary Janet Yellen warned in early May that failing to raise debt limits could lead to an "economic catastrophe."

The deadline for raising debt limits could come as soon as June 1 after federal tax revenue in April was under projection before. The United States has never "deliberately failed to pay its obligations due to debt limits," according to a post on the White House blog in 2021.

Although Allaire's comments show concern over the potential failure of US debt payments, some experts have stated that this could provide opportunities for the crypto industry. Avi Felman andten Van Bourg said in the 1000X podcast that this situation could provide opportunities for crypto assets.