Circle Confirms $3.3B of USDC's Cash Reserves Stuck at Failed Silicon Valley Bank
Silicon Valley Bank, one of the reserve banking partners for Circle's USDC stablecoin, was shut down by regulators on Friday.
Stablecoin issuer Circle said late Friday that $3.3 billion in cash deposits remained at Silicon Valley Bank (SIVB), the lender that was shut down earlier in the day by regulators after suffering a run on deposits. The sum represents some 8% of the total reserves backing Circle's stablecoin USDC.
Silicon Valley Bank was one of the six banking partners where Circle held a part of the reserve assets backing its $40 billion USDC stablecoin.
USDC is the second-largest stablecoin on the market and a fundamental element of the crypto ecosystem. Concerned investors redeemed over $1 billion of USDC tokens over Friday, causing USDC to temporarily losing its dollar-peg on some exchanges and pushing the largest stablecoin swap pool on decentralized finance platform Curve into heavy imbalance.
At press time, USDC fell to 95 cents against USDT, the largest dollar-pegged stablecoin, on crypto exchange Kraken.
"Circle is currently protecting USDC from a black swan failure in the U.S. banking system," Dante Disparte, Circle's chief strategy officer, tweeted late Friday. "SVB is a critical bank in the U.S. economy and its failure – without a Federal rescue plan – will have broader implications for business, banking and entrepreneurs," he added.
UPDATE (March 11, 2023 04:48 UTC): Adds USDC price on Kraken and comment from Dante Disparte.
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