According to the latest reports, positive developments regarding Circle’s $3.3 billion reserves held at Silicon Valley Bank and its new banking partners have pushed USDC higher towards the $1 peg.
After Fed Announcement, USDC is Pegged to $1 Again
USDC coin bounced back to the $1 level after CEO Jeremy Allaire confirmed that its reserves are safe and the company has new banking partners lined up at “banking open tomorrow morning.” According to the information provided by CoinGecko, USDC has gained 3.3% over the past 24 hours to stand at $0.99 at press time.
Prices fell to $0.87 over the weekend amid concerns about the roughly $3.3 billion USDC reserves held at Silicon Valley Bank, which have been taken down by the California Department of Financial Protection and Innovation on March 10. Reports show that Circle also has an unrevealed amount of reserves tied to 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 help liquidity-stricken banks like SVB: “100% of USDC reserves are also safe and secure, and we will complete our transfer for remaining SVB cash to BNY Mellon. As previously shared, liquidity operations for USDС will resume at banking open tomorrow morning.”
Allaire also said that Circle could no longer process USDС minting and redemption via SigNet, after the implosion of crypto-friendly Signature Bank on March 12. According to the reports, the company will be temporarily “relying on settlements through BNY Mellon.”
The CEO outlined that it would move quickly in this regard, but revealed that Circle “could launch a new bank partner with automated minting and redemption as soon as tomorrow.”
Following Allaire’s statement and the Fed’s announcement, asset prices across the board surged, with the cryptocurrency market capitalization now at $1 trillion after plummeting to $961 billion on March 11.
Despite the Signature Bank collapse, digital assets such as Bitcoin, Ethereum, Cardano, Polygon, and Solana saw a staggering gain of 10.6%, 11.4%, 12.3%, 11.7%, and 15.1% in the last 24 hours alone. Signature Bank is considered the last crypto-friendly bank in the United States, following the closure of Silvergate and SVB, and it is currently unknown what the major entry and exit ramps for crypto banking are.
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