USDC Rebounds to $1 After Fed Announcement

Circle’s stablecoin, USD Coin (USDC), has announced that its reserves are safe and that the company has new banking partners waiting in line “when the banks open tomorrow morning,” after CEO Jeremy Allaire confirmed that its reserves are safe. It is recovering to the $1 peg.

At the time of writing, USDC was up 3.3% over the past 24 hours to $0.99, according to data from CoinGecko.

USDC price chart. Source: CoinGecko

Prices fell to $0.87 over the weekend after Silicon Valley Bank (SVB) was shut down by the California Department of Financial Protection and Innovation on March 10 amid concerns over holding $3.3 billion worth of USDC in reserves.

Circle also has an undisclosed nest egg in recently bankrupt Silvergate.

In a March 12 Twitter post, Allaire praised the U.S. government and the Federal Reserve for a $25 billion funding program to support banks like SVB struggling with liquidity:

“The 100% USDC reserve is also safe and secure, and we will complete the transfer of the remaining SVB cash to BNY Mellon. As previously shared, USDC liquidity operations will resume tomorrow morning when banks open.”

Update thread on USDC

We are pleased to see the U.S. government and financial regulators taking key steps to mitigate the risks posed by parts of the banking system.

100% deposits from SVB are safe and open for business tomorrow.

— Jeremy Allaire (@jerallaire) March 12, 2023

Circle will no longer be able to process USDC minting and redemption through SigNet following the collapse of crypto-friendly Signature Bank on March 12, Allaire added, and the company will temporarily “rely on BNY Mellon’s settlement.”

Information source: compiled by 0x information from COINTELEGRAPH.Copyright belongs to the author Brian Quarmby, without permission, may not be reproduced

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