Why Crypto Businesses Need A Balanced Treasury Strategy

As of November 17, 2022, Circle Yield is not accepting new loans. We are evaluating future updates to the program.

Benefits and challenges to blockchain technology are well-known. Even for crypto businesses who have grown up in the industry, digital asset volatility can rapidly impact the business environment, and making decisions about allocating treasury reserves can feel like an unbalanced choice between risk, return, and security.

With price action of cryptocurrencies like Ethereum and other protocol tokens closely correlated, founders and treasury managers need to mitigate market risks while protecting their treasury balances.

Strategies like rebalancing to a wider basket of digital assets fail to address the fundamental market risk of correlated assets, while hedging with options or futures interest-bearing digital currencies can be unpredictable and expensive, and can carry regulatory uncertainty.

After assessing the broader digital asset ecosystem, some leaders in the industry are looking to dollar digital currencies like USD Coin (USDC) to mitigate risk without sacrificing overall liquidity.

Circle Yield offers qualified businesses above-average APYs on loaned USDC, powered by crypto capital markets. Circle Yield offers terms ranging from one to twelve months, and loans are fully-secured and overcollateralized, helping guard against loss of funds even during periods of downside volatility.

Circle Yield can help manage volatility risk while offering a predictable source of income on working capital that might otherwise earn considerably lower returns in a traditional bank account.

By offering an overcollateralized, USDC-denominated source of yield that provides superior returns compared to holding cash in a bank account, Circle Yield offers crypto businesses a simple and professionally managed option for striking a balance between keeping pace with inflation and taking outsized exposure to assets like Bitcoin or Ethereum.

Circle Yield allows short-term cash requirements to be available on a predictable schedule, while still generating investment income and without interfering with long-term digital asset holdings.

USDC allocated to Circle Yield can be used across multiple blockchains and can easily be converted to USD for use in the traditional financial system using Circle’s Payments and Payouts APIs or the Circle Account.

On-chain, USDC offers near-instant transactions and settlement 24/7/365, with fees that are often a fraction of the cost of existing banking rails.

*Offering subject to business approval, geographical availability***, and regulatory authorization, and there is no guarantee that the product will become available in a specific timeframe or to a specific customer or geography. Circle Yield offered by Circle International Bermuda Limited (“Circle Bermuda”).

Circle Account and money transmission services are provided by Circle Internet Financial, LLC or, for customers using Circle Account services located in the United Kingdom, Circle UK Trading Company Limited. Circle Internet Financial, LLC, NMLS # 1201441, is a licensed provider of money transmission services. Circle Payments, LLC, DFPI Money Transmitter License # 2549, is registered under the California Department of Financial Protection & Innovation. A full list of Circle’s licenses can be found here. 

Circle is not a bank; your Circle Account is not a bank account, and any funds are not insured by the Federal Deposit Insurance Corporation, the Securities Investor Protection Corporation or by any US or foreign government agency, insurance fund, person or entity. For investors in the United States, investments described in this communication are offered by Circle Bermuda to “accredited investors” only in accordance with Regulation D, Rule 506(c) of the Securities Action of 1933, as amended. While Circle Bermuda is regulated by the Bermuda Monetary Authority for digital asset business, Circle Bermuda is not engaged in banking and deposit taking activities and is not regulated for these purposes. You should carefully conduct your own investigations and analyses in connection with any participation in this product, including its objectives, risk factors, fees and expenses and the information set forth in these materials. All prospective participants in the products described herein are advised to consult with their legal, accounting and tax advisers regarding any potential participation. Please read the offering documents carefully before you invest. Additional information is available upon request. 

**Rates are purely indicative and are subject to change pending availability, approval and market conditions.. 

*** Not currently available in the following U.S. states: Alaska, New York and Hawaii.