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Given this all-caps disclaimer, I wouldn't exactly be reassured that USDC would be worth anything in the event Coinbase went out of business:

"USDC IS NOT LEGAL TENDER. USDC IS A DIGITAL CURRENCY AND COINBASE HAS NO RIGHT TO USE ANY USDC YOU HOLD ON COINBASE. COINBASE IS NOT A DEPOSITORY INSTITUTION, AND YOUR USDC WALLET IS NOT A DEPOSIT ACCOUNT. YOUR USDC WALLET IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC) OR THE SECURITIES INVESTOR PROTECTION CORPORATION (SIPC)."

(https://help.coinbase.com/en/coinbase/getting-started/genera...)




If you read the FAQ, Coinbase doesn't even issue USDC, Circle does, so Coinbase going out of business won't affect the balances in Circle's bank account or the redeem-ability of USDC. They also actually publish regular audits unlike Tether

https://help.coinbase.com/en/coinbase/getting-started/genera...


>Given this all-caps disclaimer, I wouldn't exactly be reassured that USDC would be worth anything in the event Coinbase went out of business:

But every line in the disclaimer are probably applicable to bond/USD ETFs as well, but people aren't exactly fleeing from those.


Bond holders have a certain legal right to claims on assets of a company that becomes insolvent - I'm not sure what legal rights USDC holders would have.

But either way, I think most people would not tend to view something like USDC as a bond (in which the bond holder is a creditor to the bond-issuing organization, with the associated risk-adjusted return on capital), but more like cash.


Should the assets of the company provide full backing of the bonds?




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