That is definitely not how USDC is set up. The creator takes 1 USD, and gives ba... | Hacker News

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		khold_stare on March 11, 2023 \| parent \| context \| favorite \| on: USDC depegs as Circle confirms $3.3B stuck with Si... That is definitely not how USDC is set up. The creator takes 1 USD, and gives back 1 USDC and vice versa. In this case, some of the USD held at SVB disappeared, so Circle has less money for the USDC -> USD redemptions. There needs to be a 1:1 backing, otherwise a stable coin is just smoke and mirrors.

TekMol on March 11, 2023 [–]

    creator takes 1 USD, and gives back 1 USDC and vice versa

How do they make money then?

nikanj on March 11, 2023 | | [–]

They invest the USD. If the investments work out, they keep the profits. If they don’t, the customers just got crypto’d

humanizersequel on March 11, 2023 | | | [–]

Short term treasuries. They're a liquidity provider for the US government.

true_religion on March 11, 2023 | | [–]

Transaction fees I think?

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