Circle’s stablecoin USD Coin (USDC) climbs back to its $1 peg after confirmation from CEO Jeremy Allaire that its reserves are safe and that the company has new banking partners lined up for “banking open tomorrow morning.”
According to CoinGecko data, the USDC is up 3.3% over the past 24 hours to sit at $0.99 at the time of writing.
The price fell to just $0.87 over the weekend amid concerns about $3.3 billion in USDC reserves held at Silicon Valley Bank (SVB), which was shut down by the California Department of Financial Protection on March 10 and Innovation.
Circle also has an undisclosed amount of reserves in recently bankrupted Silvergate.
In a March 12 Twitter thread, Allaire praised the US government and the Federal Reserve for their $25 billion funding program to support liquidity-stressed banks, such as the SVB:
“100% of USDC reserves are also safe and we will complete our transfer for the remaining SVB money to BNY Mellon. As previously shared, liquidity operations for USDC will resume tomorrow morning upon bank opening.”
Update thread on USDC
We were encouraged to see the US government and financial regulators take critical steps to mitigate the risks arising from the fractional banking system.
100% of SVB deposits are safe and will be available tomorrow at Banking Open.
— Jeremy Allaire (@jerallaire) March 12, 2023
Allaire added that following the implosion of crypto-friendly Signature Bank on March 12, Circle is no longer able to process USDC coins and redemptions through SigNet, and the company will temporarily “rely on settlements through BNY Mellon.”
However, the CEO outlined that things will move quickly in this regard, as he revealed that Circle is “bringing to market a new transaction banking partner with automated coin and redemption, potentially as soon as tomorrow.”
Allaire’s statement and the Federal Reserve’s announcements were followed by a significant rise in asset prices across the board, with the total crypto market cap exceeding $1 trillion after the sharp drop to $961 billion on March 11.
Despite the turbulence we’ve seen in the traditional banking sector lately, Coinbase just keeps on working. At Coinbase, all customer funds remain safe and accessible, including USDC conversions which will resume on Monday.
— Coinbase (@coinbase) March 12, 2023
Assets such as Bitcoin (BTC), Ether (ETH), Cardano (ADA), Polygon (MATIC), and Solana (SOL) are up 10.6%, 11.4%, 12.3%, 11.7% in the past 24 hours. % and 15.1% pumped alone.
This is especially despite the collapse of the Signature Bank.
Signature was seen as the last crypto-friendly bank in the US after the closure of Silvergate and SVB, and it is now unclear what the main ups and downs of banking into crypto are.