SVB Impact on USDC and Circle (USDC Manager)

Payments-technology firm Circle tweeted Friday that $3.3 billion of the $40 billion of its USD Coin (USDC) cryptocurrency reserves remained at Silicon Valley Bank. “Like other customers and depositors who relied on SVB for banking services, Circle joins calls for continuity of this important bank in the U.S. economy and will follow the guidance provided by state and federal regulators,” the Boston-based company said in a tweet on Friday. The bank, Circle said in another tweet, is one of six that it uses for managing the 25 percent of USDC reserves held in cash. The company had about $44.5 billion worth of tokens in circulation in January, according to a reserve report issued by accountants at Deloitte. Circle Internet Financial's USDC stablecoin massively depegged from its intended $1 price – a harrowing development for a product designed as a place for investors to safely park money. The USDC/USDT pair (which tracks Circle's coin versus the bigger one issued by Tether) sank as low as $0.869 on the Kraken exchange at 07:16 UTC on March 11, 2023 – far lower than it ever got amid the market stresses that followed the FTX debacle in November. It was back to around $0.94 as of 18:07 UTC. Stablecoins derive their value from those reserves; if one is worth more than $43 billion – as USDC was before – there should be roughly that much cash or cash-like fixed-income instruments stashed somewhere backing that up. USDC's market capitalization has now slumped below $40 billion. It's worth noting to say that other stablecoins such as MakerDAO's DAI, FRAX, USDD have also depegged from $1. However, USDT, meanwhile, at one point spiked to $1.06 on Kraken versus the U.S. dollar as investors appeared to shift money away from USDC. Bitcoin climbed back above $20,000.

Red Bank USDC Repayments