The issuer of the second-largest stablecoin Circle has stated that it held an undisclosed portion of its $9.8 billion cash reserves at the failed Silicon Valley Bank as of 17th January 2023.
Circle Still Has $3.3 Billion Held Up At SVB
According to Circle’s latest attestation, the US-based stablecoin issuer holds a part of the USDC’s cash reserves at Silicon Valley Bank. USDC has a circulating supply of around $43 billion, fully backed by government bonds and cash-like assets. According to the company’s January reserve report, the firm held nearly $10 billion in cash at various regulated banks to shore up USDC’s value. On 10th March, cash deposits in its reserves stood at $11.1 billion, according to its website.
USDC’s banking partners included Silicon Valley Bank, Citizens Trust Bank, Bank of New York Mellon, Customers Bank, New York Community Bank, Signature Bank, and Silvergate Bank. Circle also holds a part of its reserves in a dedicated BlackRock fund.
USDC Concerns
Concerns around USDC have been growing recently after it emerged in Circle’s latest audit that as of 31st January 2023, $8.6 billion, around 20% of its reserves, were held up at various financial institutions. These include the recently bankrupt Silvergate and now shuttered Silicon Valley Bank. However, Circle had stated last week that it had cut all ties with Silvergate bank.
In an attempt to assuage fears and provide transparency, Circle stated that it had initiated wire transfers on Thursday to remove balances from SVB. However, these were not yet processed, leaving around $3.3 billion of its reserves stuck at the bank. Circle tweeted, stating,
“Following the confirmation at the end of today that the wires initiated on Thursday to remove balances were not yet processed, $3.3 billion of the ~$40 billion of USDC reserves remain at SVB.”
USDC Conversions Paused
Piling on further misery on Circle, shortly after the USDC issuer’s announcement, Coinbase sta
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Author: Amara Khatri
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