Stablecoin issuer Circle disclosed late Friday that around $3.3 billion of its $40 billion USDC reserves remained at Silicon Valley Bank. This comes after the high-tech lender’s share price dropped precipitously in response to a run on deposits by nervous consumers.
Silicon Valley Bank crumbled on Friday morning, sending shockwaves through the cryptocurrency and global markets, 48 hours after a capital crisis triggered the second-largest collapse of a US financial institution in history.
With a total supply of $43.5 billion, all of which is backed by government bonds and cash equivalents, USDC is the second largest stablecoin in circulation.
Regulators Shut Down Silicon Valley Bank
According to data from CoinMarketCap, USDC’s market capitalization decreased to $42.4 billion on Friday. The USDC also de-pegged from $1, a hint of concern over its existing reserves.
Silicon Valley Bank has been shuttered by California banking regulators, who are now in charge of the lender’s deposits, a Friday press statement from the Federal Deposit Insurance Corporation shows.
Image: Getty Images
Based on reports, the FDIC has set up a new bank, the National Bank of Santa Clara, which will hold all of SVB’s assets.
With around $209 billion in assets at the end of 2022, Santa Clara-based SVB, known for lending money to some of the largest tech companies, was listed as the sixteenth largest bank in the United States.
In an effort to provide clarity on the problem, Circle reported on March 10 through Twitter that:
1/ Following the confirmation at the end of today that the wires initiated on Thursday to remove balances were not yet pr
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Author: Christian Encila
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