USD Coin (USDC) stablecoin company Circle has confirmed that it has failed to withdraw its $3.3 billion assets from Silicon Valley Bank. The company defined this amount as the amount that could not be withdrawn from the $40 billion asset in the bank. This statement caused the popular stablecoin to lose its 1 dollar stable.
CircleOn March 9, the Federal Deposit Insurance Corporation initiated proceedings to withdraw funds from Silicon Valley Bank as the bank insured was about to cease operations. However, on March 11, remittances were not fully processed and $3.3 billion of USDC reserves were still in the SVB. confirmed.
At the time of writing, USDC was trading at $0.882 and it even climbed over 11% as the drop was quite volatile. A Circle executive envisions broader consequences for business, banking and entrepreneurs without a Federal bailout.
2/ Like other customers and depositors who relied on SVB for banking services, Circle joins calls for continuity of this important bank in the US economy and will follow guidance provided by state and Federal regulators.
NEWS CONTINUES BELOW— Circle (@circle) March 11, 2023
According to Dante Disparte, Circle’s chief strategy officer and head of global policy Silicoin Valley BankIt is critical to the U.S. economy and warned that “without a federal bailout, its failure will have broader implications for business, banking and entrepreneurs,” he added.
As with Silvergate, our teams are working quickly to limit the risks banks are exposed to. This includes a remittance request made prior to the SVB being transferred to a trustee by the FDIC. There remains a $3.3 billion cash exposure, but we follow state and Federal regulatory guidelines.
On-chain data also reveals that Circle used a net $1.4 billion in USDC within 8 hours. To mitigate exposure, crypto companies such as Coinbase and Jump Trading have used approximately $850 million and up to $138 million in USDC.
Just two weeks ago, on February 23, USDC issuer Circle had a positive reaction in the markets, announcing that it plans to increase its staff by 25% in opposition to the ongoing trend of layoffs.
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