Thanks @fabrice for sharing the details.
I have one more question about increasing the total amount of asset. As this is immutable field, how can increase in reserve be handled.
I mean currently USDC has $1.1B in bank reserve and they have issued USDC asset on Algorand with their Reserve Address holding this $1.1B. They can be minted and burned as you explained.
Also this USDC is a verified asset by Algorand and different accounts have opt-in the verified USDC and is using the benefit of underlying Algorand network for instantaneous (5 seconds) Authorisation, Clearning and Settlement.
Lets say, in 2021, USDC increased its bank reserve by $5B due to demand, the same need to be issued on Algorand for circulation. How can I increase the existing USDC, considering it is already opt-in by multiple accounts and is verified by Algorand.
It can only happend by issuing another USDC asset with a different asset id on top of Algorand with $5B supply. And this again need to go through same Algorand asset verification, and opt-in for users to use it. And in this case users will be holding two different USDC in the same account.
Could you please explain more about this and how existing stablecoins on top of Algorand are handling this issue. I am asking this from CBDC (Central Bank Digital Currency) intiative, where they be will increasing the reserve and printing(minting) more money into circulation.