Following the USDC depeg incident, Reaper Financial, an Austin, Texas-based blockchain financial service focused on acquiring and destroying Crypto assets, announced the conversion of USDC in its perpetual DRIP fund to XRP.
“Due to a potential decoupling event, USDC in the perpetual DRIP fund has been converted to XRP until stability returns. We will update as the situation develops,” Ripple lawsuit participant said in a tweet.
Due to a potential decoupling event, USDC in the perpetual DRIP fund has been converted to $XRP until stability returns.
We will update as the situation develops. $RPR $ASC $ARK $XRP $USDC pic.twitter.com/uGPHKXCXcb
– Reaper Financial (@TheReaperCoin) March 11, 2023
USDC issuer Circle recently confirmed in a tweet that $3.3 billion of its total $40 billion USDC reserves are parked at troubled Silicon Valley Bank (SVB). The bank is also one of six banking partners that Circle uses to manage more than 25% of its USDC cash reserves.
1/ $3.3 billion of the ~$40 billion USDC reserve remains with SVB after confirming at the end of the day that the wire transfer initiated on Thursday to remove the balance had not been processed.
— Circle (@circle) March 11, 2023
As a result, the USDC stablecoin lost its peg to the U.S. dollar as investors redeemed. According to reports, investors have cashed out nearly $8 billion worth of USDC from centralized exchanges in the past 24 hours.
At the time of writing, USDC is still trading below its peg to the U.S. dollar at $0.918. At press time, stablecoins DAI, USDD, and FRAX were trading below their pegs to the U.S. dollar. According to Nansen, Circle destroyed $2.34 billion in USDC in the past 24 hours. About 70%, or $1.65 billion, was burned in the past eight hours, it said.
Exchanges have also taken action following the recent events. Due to current market conditions, Binance has suspended the automatic conversion from USDC to BUSD. Cryptocurrency exchange Coinbase has decided to suspend USDC:USD conversions over the weekend.
Ripple CTO David Schwartz said the company will issue an official statement in response to questions about whether it had contact with the troubled SVB.
0X simplified Chinese version:XRP Used by Blockchain Financial Services as Solution to Convert Funds During USDC Depeg