- Circle stated that it was unable to take $3.3 billion out of Silicon Valley Bank.
- After its collapse, SVB has been placed under FDIC receivership
- USDC fell 8% on the news and was depegged to $0.91 by Saturday morning.
Circle, the cryptocurrency payments company that issues USDC stablecoins, confirmed that USDC reserves worth $3.3 billion are still at Silicon Valley Bank.
After crypto markets collapsed on Thursday due to the collapse of SVB, Silvergate Bank, the latest news about USDC is here.
USDC depegs after Circle confirms $3.3 Billion SVB exposure
In a tweet late Friday, Circle noted that efforts to remove its balances from the bank had failed on Thursday, meaning $3.3 billion of the stablecoin’s cash reserves remain at the bank.
“Following the confirmation at the end of today that the wires initiated on Thursday to remove balances were not yet processed, $3.3 billion of the ~$40 billion of USDC reserves remain at SVB,” the firm noted.
Following up on its confirmation of the bank’s collapse, the firm tweeted:
“Like other customers and depositors who relied on SVB for banking services, Circle joins calls for continuity of this important bank in the U.S. economy and will follow guidance provided by state and Federal regulators.”
Circle had previously revealed that SVB was one the six banking partners that held approximately 25% of USDC’s cash reserve. Signature Bank and Silvergate Bank were among those that have recently declared liquidation.
The full list of banks that held cash for Circle’s USDC are Bank of New York Mellon, Citizens Trust Bank, Customers Bank, New York Community Bank (a division of Flagstar Bank, N.A.), Signature Bank, Silicon Valley Bank and Silvergate Bank.
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Even as sentiment veered south, Circle had noted that it continued to “operate normally,” hinting that it was waiting for clarity on the impact of SVB’s FDIC receivership on depositors before providing more details.
With uncertainty increasing, USDC lost the dollar peg and fell more than 8 percent to lows of $0.91 Saturday morning.
“A black swan failure in US banking system”
Dante Disparte, the Chief Strategy Officer & Head of Global Policy at Circle, also commented on the unfolding events, noting that the company was “protecting USDC from a black swan failure in the US banking system.”
“[SVB] is a critical bank in the US economy and its failure – without a Federal rescue plan – will have broader implications for business, banking and entrepreneurs,” he added.
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