Circle to ‘Cover Any Shortfall’ in USDC Reserves, Sparking Stablecoin Rally

The company plans to use corporate resources to fill the gap, including external capital.

AccessTimeIconMar 11, 2023 at 8:58 p.m. UTC
Updated May 9, 2023 at 4:10 a.m. UTC

Circle Internet Financial said Saturday it will “cover any shortfall” in the assets backing its stablecoin USDC in the event it does not receive the entirety of a $3.3 billion cash reserve it was holding at Silicon Valley Bank.

In a blog post, Circle said it “will stand behind USDC and cover any shortfall using corporate resources, involving external capital if necessary.”

The pledge came as crypto traders fretted over the value of USDC, a stablecoin meant to be pegged to the U.S. dollar but which fell in value after Silicon Valley Bank’s collapse. Circle was holding $3.3 billion of USDC’s cash backing at Silicon Valley Bank when the FDIC seized the bank’s assets on Friday.

Circle said it attempted to move its assets out before SVB’s collapse and that the transaction could settle on Monday, when U.S. banks resume normal operations.

“However, it is also possible that SVB may not return 100% and that any return might take some time, as the FDIC issues IOUs (i.e., receivership certificates) and advanced dividends to deposit holders,” Circle said.

The value of the stablecoin fell as low as 88 cents in the last 24 hours, before rebounding to 97 cents, after the announcement, according to CoinGecko.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Danny Nelson

Danny is CoinDesk's Managing Editor for Data & Tokens. He owns BTC, ETH and SOL.