- Circle said it was unable to withdraw $3.3 billion from Silicon Valley Bank.
- SVB has been under FDIC control since its collapse.
- USDC lifted the peg on the news and fell 8% to a low of $0.91 on Saturday morning.
Circle, a blockchain payments company that issues USDC stablecoins, has confirmed that USDC reserves worth $3.3 billion are stuck in troubled Silicon Valley banks.
The latest cryptocurrency news on USDC comes after the crypto market fell Thursday amid the collapse of SVB and Silvergate Bank.
USDC Unpegs As Circle Confirms $3.3 Billion SVB Exposure
and Tweet Late Friday, the Circle noted that an attempt Thursday to remove the balance from the bank failed. That means $3.3 billion of stablecoin cash reserves remain in banks.
“$3.3 billion of USDC’s $40 billion reserves remain in the SVB after it was confirmed at the end of the day that the wire transfer initiated Thursday to remove the balance had not yet been processed.‘, the company noted.
In a follow-up tweet confirming the exposure of the bankrupt bank, the company said:
“Like other customers and depositors who have relied on SVB for their banking services, Circle will join the call for the continuation of this important bank in the U.S. economy and will follow the guidance provided by state and federal regulators.“
Circle previously disclosed that SVB is one of six banking partners holding about 25% of USDC’s cash reserves. This includes Signature Bank and Silvergate Bank, which recently announced liquidations.
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 (Flagster Bank, a division of NA), Signature Bank, Silicon. Valley Bank, Silvergate Bank.
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— Unusual Whales (@unusual_whales) March 11, 2023
Even as sentiment tilts south, Circle continues to say it’s “running normally”, waiting for clarity on the impact of SVB’s FDIC receivership on depositors before providing details I implied that I was there.
But amid heightened uncertainty, USDC lost its dollar peg, dropping more than 8% to a low of $0.91 early on Saturday.
“The Black Swan Failure in the U.S. Banking System”
Dante Disparte, Circle’s Chief Strategy Officer and Global Policy Officer, also commented on the unfolding events, saying the company is “protecting USDC from a black swan failure in the U.S. banking system.” .
“[SVB] is an important bank to the U.S. economy, and its failure would have far-reaching implications for businesses, banks, and entrepreneurs without a federal bailout plan.,” he Added.