The collapse of Silicon Valley Bank (SVB) and the subsequent decoupling of the USD Coin (USDC) stablecoin from Circle Financial caused unbalanced crypto investors to panic and expect a scenario similar to the collapse of TerraUSD (UST) to develop. The founder of the CryptoQuant analytical platform, Ki Young Ju, disagrees with this assessment of events and believes that the fears are groundless. On Twitter he expressed the opinion that there is no reason to expect USDC to fall to zero.
Value dropping to zero means major shareholders are selling.
No on-chain proof of $USDC bank run found for now.
— Ki Young Ju (@ki_young_ju) March 11, 2023
Although the market capitalization of USDC stablecoin on Sunday, March 12, fell to $38.8 billion, and the asset itself was trading at $0.95, Ki Yong-ju is confident that Circle has enough financial instruments to restore quotes.
Circle announced that it has enough funds to support USDC despite $3.3 billion stuck in SVB. In addition, SVB’s operations have been insured by the Federal Deposit Insurance Agency (FDIC) and the likely payout will be around 94%. For Circle, this means that the company’s loss will not exceed $200 million, and is likely to be covered by interest payments from the US Treasury, which holds the majority of Circle’s reserves.
Source: Cryptocurrency

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