Positive developments related to Circle’s $3.3 billion reserves held at Silicon Valley Bank and its new banking partners have allowed USDC to move back closer to its $1 peg.
The Circle USD Coin (USDC) stablecoin is rising back to its $1 peg following confirmation from its CEO Jeremy Allaire that its reserves are safe and the firm has new banking partners lined up at tomorrow night’s “bank opening.” tomorrow.”
According to data from CoinGecko, USDC is up 3.3% in the last 24 hours to sit at $0.99 as of this writing.
The price fell as low as $0.87 over the weekend on concerns over $3.3 billion worth of USDC holdings at Silicon Valley Bank (SVB), which was shut down by the California Department of Financial Protection and Innovation on 10 of March.
Circle also has an undisclosed amount of reservations locked in the recently bankrupt silvergate.
In a March 12 Twitter thread, Allaire praised the US government and the Federal Reserve for their $25 billion funding program to support cash-strapped banks like SVB:
“USDC’s 100% reserves are also safe and secure, and we will complete our transfer of the remaining cash from the SVB to BNY Mellon. As previously communicated, liquidity operations for USDC will resume tomorrow morning at the open the banks.”
Update thread on USDC
We were heartened to see the US government and financial regulators take crucial steps to mitigate risks extending from the fractional banking system.
100% of deposits from SVB are secure and will be available at banking open tomorrow.
— Jeremy Allaire (@jerallaire) March 12, 2023
Update thread on USDC
We have been encouraged to see that the US government and financial regulators have taken crucial steps to mitigate the risks that spread from the fractional banking system.
100% of SVB deposits are safe and will be available at bank opening tomorrow.
Allaire added that following Signature Bank’s implosion on March 12, Circle is no longer able to process USDC minting and redemption through SigNet, and that the firm will temporarily be “relying on settlements through BNY Mellon.”
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