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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.
Updated May 9, 2023, 4:10 a.m. Published Mar 11, 2023, 3:52 a.m.
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.
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1/ 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.
— Circle (@circle) March 11, 2023
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.
Read more: Scrutiny Falls on $43B USDC Stablecoin’s Cash Reserves at Failed Silicon Valley Bank
"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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