Hello and welcome to the Overbit News for this week. The second-largest stable coin, USDC, is the subject of our first story of the day. Circle, the coins creator, had claimed that its stablecoin, USD Coin, was backed 1:1 by actual dollars in a bank account, but it was revealed in July that this was no longer the case.
Circle recently disclosed in an "attestation" from auditors Grant Thornton that cash made up just over 60% of USD Coin's reserves, with the remaining 40% backed by various debt securities and bonds.
What distinguishes stablecoins from other cryptocurrencies are pegged to an existing currency, such as the US dollar or the euro. What constitutes a stablecoin's reserves is critical, as the goal is to avoid the volatility seen in bitcoin and other major cryptocurrencies.
Circle has announced that it is changing the composition of USD Coin's reserves once more, with only cash and US Treasury bonds underpinning the stablecoin. The stablecoin was developed by Centre, a consortium founded by Circle and crypto exchange Coinbase. The change was announced on Sunday.
"Mindful of community sentiment, our commitment to trust and transparency, and an evolving regulatory landscape, Circle, with the support of Centre and Coinbase, has announced that it will now hold the USDC reserve entirely in cash and short duration US Treasuries," Centre said in a blog post.
Many crypto traders use stablecoins instead of bank accounts to buy or sell digital currencies, so traders should have faith in USDC because it is the world's second-largest stablecoin, with $27 billion in coins in circulation.
The largest stablecoin with $75 billion in circulation, Tether has drawn regulatory scrutiny amid concerns that it lacks sufficient assets to support its peg to the US dollar. Tether's issuer revealed that only 2.9 per cent of its reserves were held in cash earlier this year.
Closing out this week's edition of Overbit News, we circle in on one of the hottest trends of the crypto markets - NFT's - and more specifically, CryptoPunks.
According to statistics from the industry tracking website CryptoSlam, sales volumes of CryptoPunks surpassed $86 million on Monday, setting a daily record. The average price for a CryptoPunk this month is $199,069, which is more than double the previous month's figure. So far in August, sales have totalled $332 million. Before August, the highest monthly sales total was $135.2 million in July.
One of the oldest and popular NFT projects to date, CryptoPunks, has been shattering records in recent weeks and months.
In one of the latest big names to add a 'Punk' to their collection, Visa, the world's largest payment processor, has just publicly acquired one for 49.5 Ether (ETH), or $150,000, which is more than double its price just a month ago.
"We think NFTs will play an important role in the future of retail, social media, entertainment and commerce," said Visa's head of crypto, Cuy Sheffield, in a blog post on Monday.
CoinDesk writes the move is 'largely a PR move more than anything, which if anything, speaks volumes about the level of the frenzy surrounding the NFT market. It will surely be a point of focus in the future.
Thanks as always for reading Overbit News. Take care until next time!