USDC re-peg nearly done as Circle gets its $3.3B from SVB

  • USDC has reconsolidated at $0.99 after plummeting to a low of $0.88 last week.
  • Circle, the company that issues stablecoins, has announced that $3.3 billion of its USDC reserves have been derisked.
  • The company also noted that it has no USDC reserve exposure with Signature Bank.

The USD Coin (USDC) stablecoin has almost completely re-pegged below $0.90 following a massive de-peg last week.

According to CoinGecko data, USDC has repegged nearly 4% in the last 24 hours, with the stablecoin above $0.99 as of 7:20 am Monday morning. As his CoinGecko tweet below shows, USDC actually held an impressive level above $0.99 late Sunday.

The upbeat mood sparked by the USDC news has also permeated the broader cryptocurrency market, with Bitcoin’s price surpassing $22,000 and Ethereum regaining its $1,600 price level.

On Monday morning, the Circle announced that it will recover $3.3 billion in USDC reserves that were stuck in the collapsed Silicon Valley Bank (SVB). The development follows swift action by the U.S. Treasury Department and U.S. Prudential Regulators to make depositors across SVB and the now-closed crypto-friendly bank Signatories.

Alfonso Peccatielo, founder and CEO of The Macro Compass, highlighted the Fed’s move and its plans to “boost other liquidity issues.”

Circle says it will also announce ‘no exposure’ to collapsed signing banks

According to Circle, SVB’s $3.3 billion accounts for about 8% of the USDC’s total cash reserve backing. These money will be available when the banks open (Monday, March 13, 2023). Circle says he has a cash reserve of about $9.7 billion (23% of reserves) at BNY Mellon.

Circle co-founder and CEO Jeremy Allaire said of the US government move: press release:

We are pleased that the US government and financial regulators are taking important steps to mitigate the risks emanating from the banking system.We have long advocated full reserve digital currency banking, which isolates the base layer of internet money and payment systems from the risks of fractional reserve banks.

Also of note, Circle has repeatedly stated that there is no cash reserve exposure at the closed Signature Bank. The company also announced that customers can now access automated USDC issuance and redemption through its new banking partner, his Cross River Bank. This makes USDC redeemable 1:1 with the US dollar.

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