- Circle CEO Jeremy Allaire has stated that USDC will be supported by external capital if necessary.
- Circle executives revealed that the company has initiated a deal to transfer $3.3 billion out of Silicon Valley Bank.
- Allaire believes that the entire $3.3 billion exposure to SVB may be recoverable.
- The FDIC may allow transfer billing since it was initiated before the SVB was closed.
Jeremy Allaire at the helm of Circle Internet Financial Twitter More recently, the concerns of USDC investors and other stakeholders in the cryptocurrency industry were addressed following the collapse of Silicon Valley Bank. In a lengthy Twitter thread, the CEO clarified that while USD coin issuance and redemptions were suspended over the weekend, the stablecoin is available for on-chain transactions.
Circle CEO: USDC will be supported by external funds if necessary
According to Jeremy Allaire, 23% of USDC is backed by $9.7 billion in cash. Last week, $5.4 billion was transferred to BNY Mellon to reduce the bank’s risk. A deal followed on Thursday, March 9, to transfer $3.3 billion held by Silicon Valley Bank to other banking partners. However, the transfer had not settled as of the close of business on Friday, when the FDIC gained SVB’s override after being shut down by California DFPI.
Allaire believes that USDC issuers may be able to recoup the $3.3 billion currently stranded in SVB. He cited the FDIC’s policy, which allows transfers initiated before the bank enters takeover to be processed normally.
The FDIC should allow transactions to settle in the normal manner at the end of the bank’s standard daily processing cycle until the FDIC takes over the failing institution. ”
Jeremy Allaire, CEO, Circle Internet Financial
However, Jeremy Allaire added that failed banks may not return 100% of the funds owed to USDC issuers, and it may take some time to repay themselves. Circle’s CEO assured that in this case, the USDC issuer would “support USDC and cover any shortfalls using corporate resources, involving outside capital as necessary.”
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