Coinbase Pauses Conversions Between USDC and U.S. Dollars as Banking Crisis Roils Crypto

Circle earlier confirmed it has $3.3 billion backing its USDC stablecoin parked at now-shuttered Silicon Valley Bank.

AccessTimeIconMar 11, 2023 at 4:14 a.m. UTC
Updated May 9, 2023 at 4:10 a.m. UTC

Coinbase (COIN) hit the brakes on conversions between the USDC stablecoin and U.S. dollars late Friday as fallout from Silicon Valley Bank's (SIVB) collapse spread into the heart of crypto trading.

In a tweet, the crypto exchange said it was "temporarily pausing" the conversions while banks are closed over the weekend. The exchange said it planned to restart conversions on Monday.

The pause speaks to the chaos that's roiled the crypto industry's second-largest stablecoin in the wake of Silicon Valley Bank's demise on Friday. Speculating on the stability of USDC, traders redeemed $1.6 billion of USDC, lowering its total supply.

Late in the day, Circle confirmed that $3.3 billion of the $40 billion backing its stablecoin was on deposit at the now-shuttered lender. The fate of that cash is now uncertain, with Silicon Valley Bank having been seized by the FDIC and USDC – for the moment – having lost its dollar peg.

"Circle is currently protecting USDC from a black swan failure in the U.S. banking system," tweeted Circle Chief Strategy Officer Dante Disparte late Friday night. "Silicon Valley Bank 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."

"During periods of heightened activity, conversions rely on USD transfers from the banks that clear during normal banking hours," Coinbase said in its tweet announcing the conversion pause. "When banks open on Monday, we plan to re-commence conversions."


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

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

CoinDesk - Unknown

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

Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.