The U.S. government’s largest financial watchdogs issued a joint statement on Sunday promising to rescue every depositor at Silicon Valley Bank (SVB) — even those not fully covered by standard federal deposit insurance.
In response to the news, both Bitcoin and USDC quickly returned to their pre-bank collapse price levels.
- The Federal Reserve, Treasury, and the FDIC jointly announced that every saver has until Monday, March 13 to get their money back. Taxpayers will cover the cost as part of the resolution.
- Instead, shareholders and “certain unsecured creditors” will not be protected. Senior management has also been removed.
“This step will ensure that the U.S. banking system continues to fulfill its important role of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth,” the statement read.
- A host of business leaders, from Bill Ackman to Mark Cuban, called on the government over the weekend to stop the contagion of SVB’s collapse. Stablecoin issuer Circle — which has $3.3 billion in USDC reserves — has called for similar action.
- Circle CEO Jeremy Allaire has confirmed that all USDC reserves are now safe and SVB’s previous reserves will now be transferred to BNY Melon. “Liquidity operations on USDC will resume when banks open tomorrow morning,” he added.
- USDC is now trading at $0.9943, almost back to its expected $1 peg after Circle lost the peg after revealing its exposure to SVB on Friday.
- Bitcoin was also affected by the news, returning above $22,000 for the first time since Thursday.
BTC/USD. Source: TradingView Special Offer (Sponsored) Binance Free $100 (Exclusive): Use this link to sign up and get $100 Free and 10% off Binance Futures first month (terms) fees.
PrimeXBT Special: Use this link to sign up and enter the POTATO50 code to get up to $7,000 in deposits.
Source of information: Compiled from CRYPTOPOTATO by 0x Information.The copyright belongs to the original author and shall not be reproduced without permission