How Circle Adjusted Its Reserves Treasury to Mitigate Risks of US Debt Defaults: Latest News and Updates

According to a May 10th Politico newsletter, Circle CEO Jeremy Allaire revealed that the stablecoin issuer has adjusted its reserves treasury to reduce the risks associated with potential defaults on US government debt. Allaire explained that Circle has shifted to short-dated US Treasuries and no longer holds Treasuries maturing beyond early June to avoid exposure to debt. 

The Circle Reserve Fund, managed by Blackrock, currently holds holdings maturing no later than May 31. Earlier this week, Treasury Secretary Janet Yellen warned that the government will be forced into making "decisions" if Congress fails to raise the federal debt limit. 

The $24 trillion Treasury market and the global financial system could be negatively impacted if the country defaults on its $31.4 trillion borrowing limit, a topic which has caused conflicting views between President Joe Biden and Republicans.