- On Saturday, the United States firm behind USDC reported that $3.3bn of reserves backing were held at now collapsed SVB (Silicon Valley Bank).
- USDC is designed to trade at 1 US dollar, but according to the reports, it fell below 87 cents on March 11.
- SVB customers withdrew $42 billion in deposits as of the end of Thursday.
According to the reports, USDC, the world’s fifth-largest cryptocurrency. Dropped as low as $0.87 after Circle reported that the collapsed lender, SVB, held its reserves.
The value of the world’s famous cryptocurrency, the US Dollar Coin (USDC), fell to an all-time low on Saturday (March 11, 2023) after Circle. The United States company behind the coin, revealed that $3.3bn of reserves backing it were held at now collapsed SVB (Silicon Valley Bank).
USDC fell below 87 cents
Circle, which helps businesses and developers harness the power of USDC for payments and commerce. Reported on Twitter on Saturday that the Silicon Valley bank has $40 billion in reserves of $3.3 billion worth of USDC.
The company tweeted, After confirmation late today that the wires initiated on Thursday. To remove the balance had not yet been processed, $3.3 billion of the $40 billion of USDC reserves remains in SVB.
USDC is known as a stablecoin, meaning that the virtual currency’s value must be tied to a reference currency. USDC is designe to trade at 1 US dollar. According to the reports, it fell below 87 cents on Saturday.
Moving ahead, Circle also mentioned in that Twitter thread, “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. Will follow the guidance provided by state and Federal regulators.”
A Twitter verified user, “unusual_whales,” which provides news related to stock and crypto markets. Revealed in a tweet the list of banks that held cash for Circle’s USDC.
The user tweeted, “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 (a division of Flagstar Bank, N.A.), Signature Bank, Silicon Valley Bank and Silvergate Bank.”
Gavin Newsom, the Governor of California, where SVB is also headquartered, was in talks with the White House and examined the situation. He said in a statement that “Everyone is working with the FDIC (Federal Deposit Insurance Corporation)”. To make the situation better as soon as possible to save jobs, individual’s livelihoods. “The entire innovation ecosystem that serves as the tent poles for our economy.”
According to reports, the Silicon Valley bank fell on March 10, 2023, just 48 hours after its announcement. Leading not only to an aggressive drop in its stock, resulting in over $80 billion in market losses. Also spreading panic among the depositors and customers.
SVB customers withdrew $42 billion in deposits as of the end of Thursday. According to a filing with the California State Department of Financial Protection and Innovation. As of the end of business that day, SVB had a negative cash balance of $958 million. As mentioned in the filing, and had failed to obtain sufficient collateral from other sources.
At the time of framing this article USDC is trading at 0.9902, with a 24-hour trading volume of $8,968,859,178.