Circle’s stablecoin USD Coin (USDC) surged back to the $1 peg after confirmation from CEO Jeremy Allaire that its reserves are safe and that the company has a new banking partner lined up in “open banking tomorrow morning.”
According to CoinGecko data, USDC is up 3.3% in the past 24 hours to $0.99 at the time of writing.
The price fell to $0.87 over the weekend due to concerns about the $3.3 billion in USDC reserves held at Silicon Valley Bank (SVB), which was closed by the California Department of Financial Protection and Innovation on March 10.
Circle also has an undisclosed amount of reserves tied up in the recently bankrupt Silvergate.
In a March 12 Twitter thread, Allaire praised the US government and the Federal Reserve for a $25 billion funding program to support banks with liquidity problems such as SVB:
“100% of the USDC reserves are also safe and secure, and we will complete the transfer for the remaining SVB cash to BNY Mellon. As previously indicated, liquidity operations for USDC will continue in open banking tomorrow.
Update thread on USDC
We are very pleased to see the US government and financial regulators taking important steps to reduce risks from a fragmented banking system.
100% of the deposits from SVB are safe and will be available at the bank open tomorrow.
— Jeremy Allaire (@jerallaire) March 12, 2023
Allaire added that after the implosion of crypto-friendly Signature Bank on March 12, Circle could no longer process USDC printing and redemptions through SigNet, and the company would temporarily “rely on settlements through BNY Mellon.”
The CEO emphasized that everything will be fast in this regard, as he announced that Circle “brings new transaction banking partners automatically and automatically redeems tomorrow.”
Allaire’s statement and the Federal Reserve’s announcement have been followed by a significant pump for asset prices across the board, with the total crypto market cap now above $1 trillion after falling sharply to $961 billion on March 11.
Despite the turmoil we have seen in the traditional banking sector recently, Coinbase continues to operate as usual. At Coinbase all client funds continue to be safe and accessible including the USDC conversion that will continue on Monday.
— Coinbase (@coinbase) March 12, 2023
Assets such as Bitcoin (BTC), Ether (ETH), Cardano (ADA), Polygon (MATIC) and Solana (SOL) have returned 10.6%, 11.4%, 12.3%, 11.7% and 15, 1% in the last 24 hours. alone.
Notably this despite the collapse of Signature Bank.
Mark appears to be the last crypto-friendly bank standing in the U.S. after the closure of Silvergate and SVB, and it is currently unclear what the main banking on-and-off ramp to crypto will be.