USDC issuer Circle has gained access to $3.3 billion in deposits at the collapsed Silicon Valley Bank (SVB).
A window into the past several days, and the core macro risks from the banking sector. @SquawkCNBC https://t.co/nqvwsWt4Vf
— Jeremy Allaire (@jerellaire) March 14, 2023
Platform CEO Jeremy Allair, in an interview with CNBC, pointed out the irony of the situation in which a traditional bank harms the crypto economy, and not vice versa, as regulators pointed out.
At the same time, Allair praised the US government and financial regulators for “important steps to reduce risks.”
Update thread on USDC
We were heartened to see the US government and financial regulators take crucial steps to mitigate risks extending from the fractional banking system.
100% of deposits from SVB are secure and will be available at banking open tomorrow.
— Jeremy Allaire (@jerellaire) March 12, 2023
Allair also said that the company has moved its reserve funds to a “safe vault” – Bank of New York Mellon.
On March 10, the California Department of Financial Protection and Innovation shut down Silicon Valley Bank and appointed FDIC manager. The reason for this decision was “insufficient liquidity and insolvency.”
US regulators have said savers will have access to their deposits on March 13 at the expense of shareholders and some unsecured bond holders. These measures will also affect Signature Bank, which, along with Silvergate, was one of the main banks for participants in the crypto industry.
On March 11, amid the collapse of the SVB, the stablecoin USDC and algorithmic stablecoins DAI and FRAX lost their peg to the US dollar. Later, Circle assured of solving problems with the banking support of the asset.
The company’s stake in SVB accounted for about 8% of the total cash reserves of $42.1 billion underlying the value of the stablecoin.
Earlier, representatives of the USDC issuer and Coinbase crypto exchange accused banks of destabilizing the digital asset market.
Source: Cryptocurrency
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