Circle’s stablecoin USD Coin (USDC) is climbing back to its $1 peg following confirmation from CEO Jeremy Allaire that its reserves are safe and the firm has new banking partners lined up at “banking open tomorrow morning.”
According to CoinGecko data, USDC is up 3.3% over the past 24 hours to sit at $0.99 at the time of writing.
The price dropped to as low as $0.87 over the weekend amid concerns about $3.3 billion worth of USDC reserves being held at Silicon Valley Bank (SVB), which was shut down by the California Department of Financial Protection and Innovation on Mar. 10.
Circle also has an undisclosed amount of reserves stuck at the recently bankrupted Silvergate.
In a March 12 Twitter thread, Allaire praised the U.S. government and Federal Reserve for its $25 billion funding program to support liquidity-troubled banks such as SVB:
“100% of USDC reserves are also safe and secure, and we will complete our transfer for remaining SVB cash to BNY Mellon. As previously shared, liquidity operations for USDC will resume at banking open tomorrow morning.”
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 (@jerallaire) March 12, 2023
Allaire added that following the implosion of crypto-friendly Signature Bank on Mar. 12, Circle is no longer able to process USDC minting and redemption through SigNet, and that the firm will be temporarily “relying on settlements through BNY Mellon.”