USDC Distributor Circle Clarifies Coin’s Status: Will It Return To $1?

USDC distributor cryptocurrency company Circle has released a statement on the subject after the token lost its fixed price of 1 dollar.

The post from the official website was also shared by Circle CEO Jeremy Allaire.

The post acknowledges the growing uncertainty surrounding the USDC economy and commits to open and transparent communication going forward.

Circle Says USDC Transactions Will Continue With U.S. Banks Opening

The blog post explains that while USDC is available 24/7/365 on the chain, its issuance and repayment are subject to the operating hours of the US banking system.

As a result, liquidity operations for USDC will continue as normal when banks reopen in the US on Monday morning. The Circle team is reportedly well prepared to handle significant volume based on the strong liquidity and reserve assets they hold.

The Circle team explained that “USDC, a regulated payment token, will continue to be redeemable 1-to-1 in US Dollars.”

In the blog post shared by the company, it is stated that the fate of the sunken Silicon Valley Bank will be determined this weekend and it is hoped that the FDIC will propose a solution that will fully protect its customer assets.

Sharing an Update on USDC and Silicon Valley Bank. https://t.co/Ug3qpot8sJ

— Jeremy Allaire (@jerallaire) March 11, 2023

Circle Claims It Will Close With Its Own Funds Even If It Doesn’t Get Full Funds From Silicon Valley Bank

The company also talked about what would happen if it couldn’t get back all the funds in the bankrupt bank.

Circle is confident that the FDIC is managing the SVB’s situation and is ready to receive the funds. However, the company warns that the SVB may not be 100% refunded or refunds may take some time, as the FDIC issues IOUs and advance dividends to depositors. In such a case, Circle, according to its statement, will stand behind USDC and fill any gaps, using institutional resources, including outside capital, if necessary.

*Not investment advice.