USDC stablecoin issuer Circle has claimed that it will “cover any shortfall” caused as a result of the $3.3 billion in its funds held by the collapsed Silicon Valley Bank.

In a blog post, Circle wrote that the company is legally obliged to “stand behind” USDC and will cover any shortfall using corporate resources—and “external capital if necessary”—to ensure that the stablecoin can be redeemed at a ratio of 1 for 1 with the U.S. Dollar. CEO Jeremy Allaire reiterated the commitment in a Twitter thread.

On Friday, USDC lost its peg to the U.S. dollar following a bank run on Silicon Valley Bank and the disclosure that $3.3 billion in USDC’s cash reserves was held by the bank that the FDIC had taken over.

Overnight USDC fell to $0.87, its lowest point since 2019, before regaining ground to currently trade at $0.95, according to CoinGecko.

Circle’s collateralization

Circle reiterated its claim that USDC is 100% collateralized with cash and U.S. Treasuries.

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Author: Jason Nelson

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