Coinbase reportedly prepared a $3.3 billion USDC rescue package for Circle after the failure of Silicon Valley Bank prevented money from leaving Circle’s account.

The exchange offered to step in after Circle failed to wire funds out of Silicon Valley Bank, sparking a selloff that caused USDC to lose its dollar peg.

Coinbase Offered Circle a $3.3 Billion Instant Credit Line

A source told Fortune that Coinbase was prepared to offer Circle an instantaneous credit line to backstop USDC’s liquidity. By March 13, 2023, users would have had access to funds had the Federal Deposit Insurance Corporation not stepped in to back up SBV deposits on March 12, 2023.

Silicon Valley Bank raised capital on March 8, 2023, to boost liquidity amid a withdrawal surge after the collapse of Silvergate. The following morning, the bank’s share price had fallen about 60%. At 10:11 p.m. ET on March 10, 2023, Circle tweeted that it unsuccessfully tried to pull its reserves through a wire transfer from the bank on March 9, 2023.

Circle’s chief strategy officer, Dante Disparte, said the team worked diligently to protect USDC. His tweet may have come around the time negotiations with Coinbase started. Coinbase and Circle couldn’t announce the deal after FDIC announced it would honor all SVB withdrawal requests.

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Author: David Thomas

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