USDC
USD Coin (USDC) is a stablecoin pegged to the U.S. dollar on a 1:1 basis, backed by a reserve of cash and short-term U.S. Treasury bonds. Launched in September 2018 by the Centre consortium, USDC is issued by regulated financial institutions. It aims to be "digital money for the digital age," facilitating cashless transactions. USDC serves various use cases, including a safe haven for crypto traders, enabling businesses to accept digital payments, and impacting sectors like decentralized finance and gaming. The goal is widespread acceptance across wallets, exchanges, and other platforms.
Circle Partners with Cross River Bank for USDC Production and Redemption
Circle has partnered with Cross River Bank for USDC production and redemption, as well as expanded relationships with other banking partners like BNY Mellon. The USDC stablecoin recently experienced a peg-breaking incident but has since recovered.
Circle Plans to Cover USDC Shortfall After SVB Shutdown
Circle, the issuer of the stablecoin USD Coin (USDC), has announced that it will use corporate resources to cover the shortfall on its reserves after Silicon Valley Bank (SVB) was shut down by the California Department of Financial Protection and Innovation. USDC liquidity operations will resume as normal when banks open on Monday, enabling redemption at 1:1 with the US dollar. The stablecoin lost its $1 peg on March 11, trading as low as $0.87, due to the disclosure of $3.3 billion of Circle's reserve held at SVB.
USDC Holders Panic Sell Amid Solvency Concerns
On March 10, concerns about the solvency of USD Coin (USDC) led several holders to panic sell their holdings and switch to other stablecoins. One user lost over 2 million USDC in a failed attempt to exchange them for Tether (USDT) using KyberSwap's decentralized exchange aggregator. Tron founder Justin Sun reportedly withdrew 82 million USDC and exchanged them for Dai (DAI) using Aave v2, while IOSG Ventures sold 118.73 million USDC for 105.67 million USDT and 2,756 Ether (ETH). The USDC price has since slowly recovered, and Circle, the company behind USDC, disclosed holding $3.3 billion at the Silicon Valley Bank.
Banks increase risks to stablecoins
The death of the Terra ecosystem triggered a bear market in 2022, causing losses in billions, affecting investor sentiment, and intensifying the regulatory spotlight over cryptocurrencies. Recently, Circle's disclosure that Silicon Valley Bank (SVB) did not process its $3.3 billion withdrawal request led to the depegging of its USD Coin (USDC). This event caused Binance CEO CZ to believe that traditional banks are a risk to stablecoins that are usually pegged 1:1 with fiat currencies, like the U.S. dollar.
Circle's USDC Reserve Exposure and Potential Risks
Circle's latest audit report reveals that the company's exposure to the US banking system stands at nearly $9 billion, with its reserves held by a number of regulated financial institutions, including SVB, BNY Mellon, and Silvergate. However, recent events such as the shutdown of SVB and Silvergate's decision to shut down its crypto bank arm have raised concerns about potential risks for Circle and its stablecoin USDC.
Circle's USDC Reserves Remain Stuck at SVB, Raises Concerns Over Crypto Stability
Circle's $3.3 billion worth of USDC reserves held at Silicon Valley Bank (SVB) have not been processed, raising concerns over the stability of the cryptocurrency. This follows the disclosure that 20% of Circle's USDC reserves were held in several financial institutions, including the recently bankrupted Silvergate and the now-shuttered SVB.
The world of cryptocurrencies has been characterized by volatility, leading to concerns over their stability and reliability as a store of value. One cryptocurrency that has been touted as a more stable alternative to Bitcoin is USD Coin (USDC), a stablecoin that is pegged to the US dollar.
Circle Unable to Withdraw $3.3 Billion from SVB, Causing USDC Sell-Off
Circle, the issuer of USD Coin (USDC), was unable to withdraw $3.3 billion of its $40 billion reserves from Silicon Valley Bank (SVB), leading to a sell-off that caused the stablecoin's value to drop below its $1 peg. Circle initiated a wire transfer to remove the funds from SVB as the FDIC-insured bank was about to shut operations, but the transfer was not wholly processed, leaving $3.3 billion of USDC reserves with SVB. Dante Disparte, Circle's chief strategy officer, warned that SVB's failure could have broader implications for the US economy.
Circle's USDC Reserve Mishap Leads to Massive Sell-off
Circle's announcement that Silicon Valley Bank failed to transfer $3.3 billion of its USDC reserves led to a significant sell-off, causing the stablecoin to depeg from the U.S. dollar. Investors who tried to cut their losses by exchanging USDC for other stablecoins, such as USDT, faced exorbitant prices.
Circle's USDC Reserve Exposure and Potential Risks
Circle's latest audit report reveals that the company's exposure to the US banking system stands at nearly $9 billion, with its reserves held by a number of regulated financial institutions, including SVB, BNY Mellon, and Silvergate. However, recent events such as the shutdown of SVB and Silvergate's decision to shut down its crypto bank arm have raised concerns about potential risks for Circle and its stablecoin USDC.
Circle to Introduce Euro Coin and Cross-Chain Transfer Protocol to Solana in Early 2023
USD coin issuer and digital financial technology firm, Circle, is now set to expand its Euro Coin and its cross-chain transfer protocol to the Solana ecosystem in the first half of 2023.