[thebean11]

haha, ok, so now we're just quibbling over the definition of short term instead of discussing the concrete question of how volatile USDC's treasuries are? Just replace instances of "short term" with <= 3 months, now are we in agreement?

My point is that your 10% figure is not applicable to the treasuries Circle claims to hold. You can call them whatever you want.

[dragontamer]

The Fed is about to raise rates by 0.75% (estimated, maybe 0.5% to 1%) this week.

What do you think will happen to the value of all those treasuries? Even short term ones will decline in value. Not only because of the actual rate increase, but also over the expectation of future rate increases to clamp down on inflation.

10% drop? Probably not. But any drop in price followed by a bankrun would end up in insolvency.

[thebean11]

For a 3 month treasury the drop will be tiny, like less than 1% tiny. It's would be easy to cover during a "bank run" given that (a) they hold some portion of deposits in cash anyway and (b) they've been earning interest on these deposits for years now. That’s my whole point..do you disagree?